The Absurd Report

Obamanomics: To those of us who can still tell the difference between a tax cut and a government handout, the Democratic plan for “relief” looks more like a blueprint for dependency.

In the first presidential debate, Barack Obama repeated a claim he has made many a time — that his economic plan would cut taxes for “95% of working families.” But is this really so? Yes, more or less, but only if you accept Obama’s definition of a tax cut. And doing that may force you to leave your common-sense zone.

First of all, “working families” does not include all households. Throw in singles, retirees, students and the unemployed, and the share getting some tax-related benefit is a good deal less. The Tax Policy Center, a group affiliated with the center-left Brookings Institution and Urban Institute, says only about 80% of households would get a cut.

Then there’s the difference, not acknowledged by the Obama camp, between a real tax cut and the type of “tax relief” that looks suspiciously like welfare. A true tax “cut” is a reduction in the taxes you’re paying. In contrast, much of the “relief” in Obama’s plan consists of “refundable credit” — payments you get even if you owe no taxes at all.

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