First off, this isn't a pitch for McCain. This is only a criticism of Obama's "plan."
After hearing "if you make less than 250K you're getting a tax cut"
and "95% of you are getting tax cuts" repeated over and over by
the Obama campaign and, echoed in the media, I decided to sit
down and read Obama's tax plan at BarackObama.com.
If you only read one more paragraph of what I've written here, read the
next one.
The first thing I noticed is that Obama is not proposing any changes
to income tax rates except at the top two tiers. People in the bottom
tiers are not getting a reduction in their tax rates. The "tax cuts" that
Obama speaks of are achieved through a variety of credits and programs
that apply to specific people in specific circumstances. In essence,
social engineering.
Even if I was making minimum wage, I wouldn't qualify for a single
one of them without modifying some of my current economic behavior.
If you are a childless single or couple, you probably won't qualify for
much of anything under the Obama plan. Especially if you rent
or are debt-free on a home.
A lot of the credits Obama is proposing are "fully refundable"
which means that even someone who owed nothing
will end up getting a check. Usually tax credits can only take you
down to owing zero, but if you find yourself in one of Obama's blessed
categories you might find yourself holding (what I call welfare)
a check fom the treasury.
Here are the "tax cuts" proposed by Obama:
Opportunity Tax Credit: - people attending college would
qualify for a $4000 "fully refundable" tax credit. Fully refundable
means that, even if you have zero income tax liability, you would
get a check for the four grand (assuming you spent that much
on tuition) Can we make this retroactive for anyone that went
to college? No? Didn't think so.
Mortgage Interest Tax Credit: - I don't have a mortgage,
so I don't qualify. However, depending on how it would work
I might be able to justify going back into debt. (Supposedly
non-itemizers would be able to get the credit)
Seniors Making Less than $50,000: - I don't qualify
Retirement Savings Incentives: expansion of the saver's credit.
I would be forced to put earned income dollars into retirement
accounts to qualify for this. There is no logical reason why I would
want to be putting money into a deferred taxation plan right now,
but I suppose this is the one part of Obama's plan that I actually
could qualify for (if I wanted to lock up some money until I'm 55
so that it can have the shit taxed out of it at that point).
Expanded EITC - welfare program for people with very little
earned income and no investment income. Single people
with no kids rarely qualify for anything at all. Capital gains
and dividend income disqualify you, even relatively small
amounts. Do not qualify.
"Making Work Pay" Tax Credit - essentially another expansion of
the EITC, so I wouldn't qualify. This will be another "fully refundable"
credit - so people with no income tax liability will be getting a check
from the government.
Child Care - do not qualify
Credit for Advanced Technology Vehicles -
My car is old, but it still runs great and I see no need to buy a new one -
so I don't qualify. Not that I have the money to buy one anyway.
Dividends and Capital Gains: (no change for me, thankfully)
Tax rates on these items are going up for people in the top
two brackets. Everyone else stays the same. I'm glad I quit my
good job. I don't make shit now, and I plan on keeping it that way.
good job. I don't make shit now, and I plan on keeping it that way.
