Tuesday, October 21, 2008

Obama Tax Plan Will Screw the American Worker and the Senior Citizen

I enjoy taking to Liberals who have no idea what they are talking about. My encounter with one at work ended with educating the individual with concrete facts. The problem is that these liberals don't understand the issues. It is confusing when the candidates repeat the same rhetoric without clarification. But breaking down the issues to the simpliest form, one can easily understand their rhetoric.

In regards to Obama's tax cut to 95% of working American, he is really referring to a refundable tax credit going to the 44% of working Americans who don't pay income tax.

Whether you make less than $250,000 a year or more, I can guarantee that Obama’s plan will actually increase taxes on the vast majority of Americans. And these taxes will be guised as a refundable tax credit.

Now, what Obama hasn't told you is who will pay for these tax credits and who will get screwed the most. To make something refundable, something has to be funded in order that a check can be distributed. Therefore, since tax credits are tied to income, the more you make, the less credits you can earn. In other words, to get a refundable tax credit, more people would be discouraged from earning more, which means no yearly raises and no over-time.

Worse still, millions of Americans who pay no taxes are also entitled to these credits. Thus, people who are paying no taxes at all will still receive a check from the government.

That means 63 million Americans, or 44% of all tax filers would have no income tax liability and they would also get a check from the IRS. According to the Tax Policy Center, the cost of these tax credits would cost the tax payers over $1 trillion in the next 10 years.

Now, ontop of Obama's $1 trillion spending proposal, do you expect the top 5% of the rich to make up for this huge outlay of cash benefit? Yeah, right! So where is this $1 trillion going to come from?

The answer to that question will answer the second part of my premise. The people who will be screwed by this is the working American and the senior citizens collecting Social Security.

Yes, Social Security will be affected. If the idea that these tax credits will benefit to those who work less, then expect a decrease in payroll taxes, which funds Social Security. Get it! Since people are going to get a tax credit refund based on what they pay into Social Security, and to get the refund is to work less, then the tax credit is not about income tax relief, but cutting payroll taxes. The same payroll taxes that fund Social Security. That means it will affect every retiree who collects a Social Security check. The Obama tax credit means billions of dollars in lost revenue for Social Security. Since the Social Security system is already in trouble, this scam will threaten the lives of millions of senior citizens.

To make matters worst, since 90% of small business making less than $250,000 will get tax at the regular income tax rate, and those companies who make over $250,000, who will get a 4% surtax on their payroll tax, then every business at every level will be affected. Therefore, many business would have to cut jobs in order to pay less in payroll tax, which will decrease funds toward Social Security, and would kill this economy.

But according to Obama, “When you spread the wealth around, it’s good for everybody.”