@maporsche,
maporsche wrote:
No, it doesn't sound about right. I agree that they are fucked, but they are getting in income tax return....yet have not paid a dime in income taxes. And what Obama is apparently proposing will increase the amount they receive.
...which brings us to the point of this thread, what you're talking about now is WELFARE...which I am in support of (especially with the rules that Clinton helped to put into place in the 90's), but it shouldn't be managed through our income taxes. We have a whole office dedicated to this.
OK well I'm no expert on taxes in America, but thats not how I see it after what I read. I mean - well, ok - Obama wants to give tax refunds to middle and working class families, right? And he proposes giving it back through the income tax system. Since a large group of people dont pay any income tax, that means that they'll get money out of an income tax refund that they didnt first pay in ...
income tax. But they did pay other taxes. They paid plenty of taxes:
"Obama has proposed several tax credits that include families who earn too little to owe income taxes, a group that include about half of families with children. But many of these families work and pay thousands of dollars in other taxes. For example, a family of four must earn about $25,000 before owing income taxes--but they must pay payroll taxes on the first dollar they earn. Indeed, Obama's biggest refundable credit is designed to cushion the blow of payroll taxes."
That's from
here. Basically, the conservative fallacy on this one is that 'they dont pay income tax' = 'they dont pay taxes'. And if they dont pay taxes and yet they get tax refunds, that's just welfare, right? Thats just gifted money they're getting. But thats not right. Because these people do pay taxes, plenty of taxes, from the first dollar they earn. So all that's happning is they pay type A taxes and get a tax refund through the type B tax pipeline. Probly cause you cant refund the payroll taxes or I dont know what practicality -- but
welfare this aint.
The people who are saying that, basically, this is just the state giving away tax money to people who never paid taxes in the first place are just demagoguing. This is that whole post from which I just quoted:
Quote: McCain Channels Phil Gramm To Attack 'Lucky Duckies'
McCain advisor Douglas Holtz-Eakin slammed Obama's tax plan today, saying, "Obama has proposed a ‘tax cut' for 95 percent of people when, literally, almost 40 percent pay no federal income taxes at all." He cited a recent New York Post editorial labeling Obama's tax cuts "welfare."
It is true that Obama has proposed several tax credits that include families who earn too little to owe income taxes, a group that include about half of families with children. But many of these families work and pay thousands of dollars in other taxes. For example, a family of four must earn about $25,000 before owing income taxes--but they must pay payroll taxes on the first dollar they earn. Indeed, Obama's biggest refundable credit is designed to cushion the blow of payroll taxes.
Refundable credits are also often the most economically efficient way to help families, according to now-CBO director
Peter Orszag. Maybe that's why McCain's own
health care plan uses refundable credits.
But McCain is echoing Phil Gramm's and Newt Gingrich's old claim here that tax credits for low-income workers amount to welfare. The Wall Street Journal editorial page charmingly referred to people too poor to pay income taxes as "lucky duckies."
As a presidential candidate, George W. Bush "
sandbagged" these Republicans by defending the earned income tax credit. Now McCain is standing with Gramm and Gingrich, to the right of Bush.
--Robert Gordon and James Kvaal
