Obama’s Tax Cut is Actually a Spending Increase, Says Non-Partisan Group
- Matt Cover - CNSNews.com
- Oct 15, 2008
(CNSNews.com) – Democratic presidential candidate Barack Obama’s plan to cut taxes on 95 percent of taxpayers would effectively increase government spending by an average of $64.8 billion a year and effectively raise income tax rates for many Americans, even on some earning $20-$50,000 per year, according to the non-partisan Tax Policy Center.
The heart of Obama’s tax cut proposal is in his use of refundable tax credits, which the Center describes as “credits available to eligible households even if they have no income tax liability” -- in short, refunds available even to those who don’t pay taxes. These refunds are claimed on tax returns and are paid to all taxpayers who qualify for them, regardless of whether they owe taxes or not. These refunds have the ability of reducing a taxpayer’s liability below zero, meaning they can get a refund without actually paying taxes.
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