Obama keeps saying that 95% of people will get a tax cut under his economic plan.
Here is the truth,
Before one understands the difference between Barack Obama’s and John McCain’s tax plan, one must understand the difference between a tax cut and a subsidy. A tax cut is when someone makes money and the government allows that person to keep more of the money that was earned by that individual. A subsidy is when the government takes from one person to give to someone else. Many people in the mainstream media use the terms interchangeably, even though there are major differences between the two.
Presently, the bottom 40% of income earners pay zero income taxes. The top 20% pay 80% of all the federal income taxes. Therefore, it is not possible to give the bottom 40% a tax cut because they pay no money to the government. So this begs the question: How is Barack Obama proposing to give a tax cut to 95% of Americans?
The truth is that he is not going to give a tax cut to most Americans; it is not possible. Instead, he is going to give welfare subsidy to the bottom 40%. Sadly, the mainstream media does not know the difference so they claim that Obama is telling the truth. In fact, it is very likely that Obama does not understand the distinction either.
Obama is a liar.
Just one quibble.
Remember, the bottom 40% do pay a form of income tax. These are payroll taxes, and if you are self-employed, you know the painful feeling of paying the government every quarter even though you only earn $30,000 as an independent contractor.
Payroll taxes are wealth transfers from one of the poorer groups (younger working people) to the wealthiest group (retirees).
So it goes both ways.
Not all of the bottom 40% pay income taxes. Obama is including giving tax breaks to people who don’t earn income. That’s why it is called subsidy.
Right, of course those who pay payroll taxes are workers.
The other tax we forget is inflation. New money created by the Fed gets in the hands of the rich first. Poorer people can’t catch up with the diminishing value of the dollar. The purchasing power of their incomes drops.
I’m just saying that there’s more to the “only the rich pay income taxes” argument, which Limbaugh and other conservatives trumpet. Everyone is sucking at the teats of government. The rich, even though they lose on income taxes, get theirs too.
I’ve never believed that “only the rich pay income taxes” since typically the rich are able to pass those costs on to the consumer in some way and so recoup the cost of taxation. The rich didn’t get rich by absorbing taxation costs.
The brunt of taxation always falls on the middle class.
I quite agree that everyone is sucking at the teats of the State. Corporate Welfare is quite as noxious as individual welfare.
And if they do that bailout … you don’t want to even think about the inflation that is going to create.
I hope you’ve seen the Adjusted Monetary Base figure lately.
http://research.stlouisfed.org/publications/usfd/page3.pdf
Whoa! That is some serious inflation in a very brief span of time. Fasten your seatbelts.
Joshua,
I take it that the straight line up represents inflation?
It’s going to get a lot straighter.
Good thing I just bought a wheelbarrow to carry around all my money to buy a loaf of bread.
Yes. The Adjusted Monetary Base measures the amount of money in circulation and in bank deposits.
Better buy wheelbarrows now while they are cheap.
First, those rich people who earn too much should pay more, if you have more to give, you should give it. Especially as Christians, we REALLY need to stop taking more than we need, more than we are entitled to.
But I really wanted to comment on your “Obama is a liar” statement at the end. If he really doesn’t understand the difference, you should refer to him as Ignorant, not a Liar. Lying is a pre-meditated thing, a deliberate act. Ignorance is simply the act of not knowing.
If you are going to go through the trouble of pointing out that subsidy and tax cut are incorrectly used interchangeably, I would think you yourself would want to be clear – unless that was the point of your Obama is a Liar – to see if anyone would point out “not necessarily.”
Jfrog,
The State does not have the right to determine how much of my money, or other peoples money is the appropriate amount for us to keep. Unwarranted seizure of money through confiscatory taxation (or purposeful inflationary policy) is theft on the State’s part. The individual can determine how much of their money they keep by way of charitable giving. It is wrong… nay, sin … for the us to think that we can use the State to punish people for making money. Finally, people who keep their income are not taking. It is the State that confiscates what isn’t there’s and I’m here to tell you that nobody is, because of their thieving, lying ways is richer than the State.
Secondly, whether Obama is a liar accidentally or with malice aforethought is irrelevant. The fact of the matter is, is the man is a liar. Besides, is lying extends to so many other areas that the accusation is a comprehensive thing.
Thanks for visiting Jfrog. “Economics In One Lesson” by Henry Hazlitt is a brief read on economics you might find interesting. Also the chapter on “Ressentiment” in Herbert Schlossberg’s book “Idols For Destruction” would be helpful on the problem of envy.
Bret
Although I do appreciate the references, I must say that any reading on economics will not be high on the list.
But the second book, it intrigues me as to why you would suggest that book to me.?
I would suggest it because any thinking that suggests, as you put it, that “rich people who earn too much should pay more,” strikes me as possibly struggling with envy.
Envious of rich people… Hmmm, no.
What is there to be envious of? A large house, fancy cars, vacation homes, more clothes than I need, and working 15 hours a day to pay for it all while the nannies, butlers, and other staff maintain my house and children? Maybe a private jet so I can fly to Paris, and insist on a cup of coffee from NYC and fly there just to get it?
Okay, so those are extremes, but I am not envious of all of that. I am not envious of the sin of greed (nor am I envious of anything intentionally, as envy is also sinful). The sin I am most guilty of would probably have to be judgment, because I tend to think that those people who have that kind of money probably don’t deserve it. You talk of the taxing of rich people at a higher percentage than poor people being the government stealing. I ask you to look closely at those rich people and I bet you will see numerous examples of their theft along the way.
Maybe what we really have is a perverse case of Robin Hood.
Jfrog,
First, two wrongs don’t a right make. Even if rich people steal (a far to expansive generalization to be sure) it doesn’t make it right for the State to steal or for me to support the State’s thieving ways. The State steals from me in order to support a government education system I don’t use. But that wouldn’t make it right for me to support the State’s theft of somebody else in order to help pay for public libraries that they or I don’t use. Confiscatory taxation is always always wrong and it never helps the people it is channeled to without hurting them in far greater ways.
Second, your appealing to Robin Hood doesn’t work because in the Story Robin Hood is stealing from the State who stole from his people through confiscatory taxation. When he stole from others it was because they were in cahoots with the Sheriff of Nottingham sharing in the rapacious proceeds gained from confiscatory taxation. Go back and read the story.
I think you need to re-examine your assumptions about “rich people.” Their sins are not any more excessive then those of us who live in other economic strata. Their greed is not any greater, nor their vanity any broader than those of us who don’t have their finances.
If you want to see theft, all you need to do is look at the State. It is a institution that is built upon the premise of organized theft.
Something I’ve noticed about people with Dutch Reformed backgrounds is this tendency to sanction socialistic type behavior. It is odd.
Peace and the Blessings of Christ Jessica,