Among the issues most commonly discussed are individuality, the rights of the individual, the limits of legitimate government, morality, history, economics, government policy, science, business, education, health care, energy, and man-made global warming evaluations. My posts are aimed at thinking, intelligent individuals, whose comments are very welcome.

"No matter how vast your knowledge or how modest, it is your own mind that has to acquire it." Ayn Rand

07 November 2008

Reynolds: Obama's Tax Deceptions

Alan Reynolds, a senior fellow at the Cato Institute, published an article called "Obama's Tax Deceptions" in the National Review (Online) on 4 November 2008. Some of the interesting facts about Obama's "95% of workers and families will get tax breaks" plan are:
  • About 81% of households will owe less tax. Obama made up the 95% number.
  • About 10% of households will owe more taxes, so the plan is a soak the 10% plan.
  • The top fifth of income earners will pay an average 3.4% more, or about $7,727 per year more.
  • Married couples filing jointly will be hit the worst.
  • Obama wrote in the Wall Street Journal on 3 November that "If you work, pay taxes, and make less than $200,000, you'll get a tax cut." Untrue! Single workers making more than $80,000 will not get a tax cut. Neither will joint returns over $155,000. Liar, liar, pants on fire!
  • The Making Work Pay Credit applies on income up to $8,100 and will provide as much as $500 per earner. But it phases out for income exceeding $75,000 or joint incomes exceeding $150,000. Biden was right that tax cuts apply for those with income up to $150,000, if this is joint income.
  • HIS child care credit phases out as incomes rise from $30,000 to $58,000.
  • HIS exemption for seniors phases out as income rises from $50,000 to $60,000.
  • HIS 50% savers credit dies at $75,000.
  • HIS $4,000 college tax credit phases out with family income from $100,000 to $120,000.
  • A worker earning in the $30,000 to $43,000 range, loses as much as $5.17 for each additional $10 he earns, due to these tax breaks phasing out. This is not a great incentive to earn more if one now earns in this range.
Thanks again Alan for your great research!

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