Monday, September 29, 2008

Obama tax plan exposed

Sen. Barack Obama continues to repeat his line about reducing taxes on "95 percent of Americans" when even the most elementary understanding of economics tells you that is impossible.

But Obama, his surrogates and the sycophants in the liberal media continue to spread the lie.

Veteran political observer Michael Barone, writing in U.S. News & World Report, gives the best explanation of what Obama tax policy is all about.

From his column:
So the economic argument may focus on something voters do understand—taxes. Here, Barack Obama can argue that he represents change. He wants higher taxes on high earners and promises "tax cuts" to 95 percent of taxpayers. Actually, they're refundable tax credits, which means cash payments to the 40 percent or so of households who don't pay income tax. But those refundable tax credits are phased out as incomes rise, so his proposal amounts to, as my American Enterprise Institute colleagues Alex Brill and Alan Viard have written, "marginal rate hikes in disguise" on those with incomes as low as $27,000.

Gaining traction. The best argument against higher rates on high earners has come from Sarah Palin in her acceptance speech, in a line obviously not written by her speechwriter. "My sister Heather and her husband have just built a service station that's now opened for business—like millions of others who run small businesses. How are they going to be any better off if taxes go up?" Note that she doesn't say that Heather and her husband will be paying higher taxes themselves. She's arguing that higher taxes will hurt the economy and will hurt the little gal and guy.
Read the full column, "Democrats Might Not Benefit From Economic Distress," at the magazine's Web site.

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