Obama’s Tax Plan

This article by Neil Boortz (an Atlanta, Ga based Radio Talk show host) is what got me started on all of this.
CUTTING TAXES FOR PEOPLE WHO DON’T PAY TAXES. (http://boortz.com/nuze/200810/10102008.html)
“Do you really want to know how in the world Barack Obama is going to cut taxes on 95% of Americans when 45% of these Americans don’t pay income taxes in the first place? You should already know the answer to this question … but if you’ve been listening to too much sports talk radio, here you go. It’s very simple. Obama will just pass a series of new tax credits for the Americans. Tax credits — sounds pretty good, doesn’t it? Those tax credits will lower taxes for just about everyone! Well … there are a few things you need to know about these so-called credits.
First … these tax credits will not be available to the evil high income earners who we rely on to create the new jobs that will help our economy grow. The tax credits are only for people who might be likely to vote democrat.
Secondly … they’re not just tax credits, they’re “refundable” tax credits. In other words, they’re a fraud. As we know, about 45% of Americans don’t pay income taxes. A tax credit is not useful to someone who owes no income taxes … unless, that is, it is a “refundable” credit. Now what does that mean? It means that if you do not make enough to pay income taxes, the government will simply write you a check equal to the amount of the credit you can’t use! Do you know what we used to call this? Welfare, that’s what. Barack Obama’s promise of a tax cut for 95% of Americans is really nothing less than a promise of a new welfare income redistribution program.”
Remember Neil Boortz is a talk show host, not a reporter, so he doesn’t have to be balanced 🙂
“Secondly … they’re not just tax credits, they’re ‘refundable’ tax credits. In other words, they’re a fraud. As we know, about 45% of Americans don’t pay income taxes. A tax credit is not useful to someone who owes no income taxes … unless, that is, it is a ‘refundable’ credit. Now what does that mean? It means that if you do not make enough to pay income taxes, the government will simply write you a check equal to the amount of the credit you can’t use! Do you know what we used to call this? Welfare, that’s what. Barack Obama’s promise of a tax cut for 95% of Americans is really nothing less than a promise of a new welfare income redistribution program.”
Wikipedia – Tax Credit (http://en.wikipedia.org/wiki/Refundable_tax_credit)
“Tax credits may be characterized as either refundable or non-refundable, or equivalently non-wastable or wastable. Refundable or non-wastable tax credits can reduce the tax owed below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system, appearing to be a moderate form of negative income tax.”
If you’ve never heard of Neil Boortz before, you should visit his website at http://www.boortz.com.

Now the reality of this is that there are almost one million people who, under Obama’s tax plan, will start receiving money from the government as tax refund credits. These are people who have not paid any income tax. Even if they all receive the smallest of Obama’s proposed refund, it will cost the taxpayers of America $500,000,000,000. Yes that is 500 BILLION DOLLARS! If you start to consider and add in the possibility of a $1000 refundable credit for couples and a $4000 refundable credit for college tuition, we are looking at an added tax burden that could reach a couple of trillion dollars. Remember, this is only considering the one million recipients who already pay no taxes.
A $1,000 ‘Making Work Pay’ Tax Credit. For 95 percent of workers and their families—150 million workers overall—the ‘Making Work Pay’ credit will provide a refundable tax cut of $500 for workers or $1,000 for working couples. This credit will benefit over 15 million self employed workers and for 10 million low-income Americans, will completely eliminate their federal income taxes.”
150million workers x $500 = 75 trillion dollars.
Ok, now lets think about this. We’ve just told 10 million “low-income” Americans, “you don’t make a lot of money, so here, Uncle Sam will give you some that he’s taken from those hard working people that live in that nice neighborhood up the road. They make plenty of money anyway.” Hmmm. Do you think that will make the “low-income” earning Americans want to work harder so that they too can give extra money to Uncle Sam?
Eliminating Capital Gains Taxes for Entrepreneurs and Investors in Small Business. Barack Obama understands that small businesses are the engines of our economy, and he will eliminate all capital gains taxes on investments in small and start up firms.”
Please notice that he says nothing about cutting taxes for small businesses. Go ahead, read it again real carefully. He’s eliminating capital gains taxes for people (the investors) putting money into existing small companies and new companies. This isn’t a bad idea, but it does nothing to directly help the day-to-day operations of thousands of existing small businesses.
Cutting Corporate Tax Rates for Firms that Create Jobs in America. Barack Obama will repeal tax breaks and loopholes that reward corporations that retain their earnings overseas, and will use those savings to lower corporate tax rates for companies that expand or start operations in the United States.”
Why are corporations moving operations overseas? Just think of the last time you moved from one house or apartment to another. What part of that was easy or fun? You have to; find a new place to go, secure that place, pack all your things, move them all to the new place, cancel all the previous contracts with service providers and landlord from the old place, unpack everything at the new place, hook up all the new services and many other tedious details. Can you name one person that has done this for fun, or simply to spite someone? Typically someone moves due to a major life decision. Often it’s for a higher paying job. That is exactly what these companies are doing when they “move jobs overseas”. There is a lot more involved in moving a business (especially a large one) than there is when a family or individual moves. It wouldn’t be feasible for a company to do this if there were not major financial benefits. Those benefits are created because of America’s high corporate tax rate and many other labor laws that make doing business in America restrictive. How would you feel if your realtor or landlord said, “I don’t think moving away for a better job and more money is a good enough reason. You’re going to be penalized for that. We’re going to take the money we get from you when you move and give it to someone who moves back into the neighborhood because they’re a team player.” That’s essentially what Obama plans to do. Why not create a tax atmosphere within the United States that promotes business. How nice would it be to hear that Honda is moving all their factories to the United States? This would be a good time to plug the Fair Tax, because it would make us the number one tax haven in the world for business. More details are available at their website http://www.fairtax.org.

“Barack Obama will keep taxes low for everyone, while working to reform our tax code and make sure that everyone pays their fair share,”
You must be joking Mr. Obama! Merriam-Webster.com describes the adverb “everyone” as : every person : everybody. I would assume Senetor Obama was referring to all American citizens when he used the word “everyone” above. The word “everyone” includes the super rich and big corporations. You’re gonna keep their taxes low? Oh, and “fair share” would be an equal amount for all taxpayers, not a heavy progressive or graduated income tax, as is called for in the communist manifesto. (http://en.wikipedia.org/wiki/Communist_manifesto)
“Obama also believes that…it is vital for candidates to put forward specific ideas on how they will pay for their proposals. That is why he has called for…repealing a portion of the tax cuts passed in the last eight years for families making over $250,000.”
Sounds fair, doesn’t it?
“Our tax code is riddled with special interest loopholes that allow some corporations and wealthy individuals to avoid paying their fair share of taxes. As President, Obama would move aggressively to close inefficient loopholes.”
There he goes using the word fair again. Just so we’re all on the same page, m-w.com describes fair as : marked by impartiality and honesty : free from self-interest, prejudice, or favoritism. And if you think the corporations and wealthy individuals are paying their fair share, look at the table below that lays out exactly who pays what taxes

For Tax Year 2006

Percentiles Ranked by AGI
AGI Threshold on Percentiles
Percentage of Federal Personal Income Tax Paid
Top 1%
$388,806
39.89
Top 5%
$153,542
60.14
Top 10%
$108,904
70.79
Top 25%
$64,702
86.27
Top 50%
$ 31,987
97.01
Bottom 50%
<$31,987
2.99
Note: AGI is Adjusted Gross Income
Source: Internal Revenue Service

The bottom 50% pay less than 3% of the total Federal Personal Income Tax. Sounds “fair” right?

The top 1% of wage earners pay more than ten times (10 x) the taxes of the bottom 50% combined!

“Eliminating special tax breaks for oil and gas companies: including repealing special expensing rules, foreign tax credit benefits, and manufacturing deductions for oil and gas firms.”
How do you think that will help with gas prices?
“Cracking down on international tax havens: According to a recent Congressional investigation, offshore tax abuse costs this country up to $100 billion each year. Barack Obama has been a leader in the Senate on designing efforts to crack down on tax havens by requiring greater disclosure of financial transactions in tax secrecy jurisdictions. As President, Obama would work with Congress to enact meaningful legislation to ensure that the Treasury and IRS have the tools they need to close down the use of international tax havens for improper tax avoidance or tax evasion. This will save the United States tens of billions of dollars each year.”
Any consumption tax system (hopefully the FairTax) would completely eliminate this problem, because all taxes would be collected at point of sale for new goods and services. There would no longer be any incentive for companies to hide money offshore. On top of that, drug dealers, prostitutes, illegal aliens, and tourists will all pay federal tax under a consumption tax plan every time they buy something.
These are just the points of Senetor Obama’s tax plan that stuck out to me. I encourage you to read his full plan, as well as Senetor McCain’s, so you can make an informed decision about who will bring this country in the right direction. On November 4th, we will all have a chance to cast our vote. These are some of the most important decisions we make throughout our lives. We all have spare time if we choose to find it. Please make time. Turn off the TV and hop on the internet and research the two candidates. You cannot base your decision on just what the news media will tell you, and you definitely can’t base it solely on what talk radio hosts or I say. We all have to know, within ourselves, what we stand for and believe in. I believe in the American dream. That dream is Freedom and Liberty. God Bless America.
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