McCain's Welfare

McCain and Palin's and the radical right's cry of socialism is just that --a cry. Desperation.

Factcheck.org: The McCain campaign has taken to denigrating some of Obama's tax proposals as "welfare" rather than tax cuts. And it continues to mislead about who would see a tax increase.
A new McCain-Palin Web ad characterizes Obama's proposed refundable tax credits as "welfare." But McCain himself proposes refundable tax credits, too, as part of his health care plan, and calls them "reform."

The ad also says "hard-working families" and "seniors" would pay higher taxes. But – need we say this again? – that would be true only for the affluent few, not for the many.
Analysis
The "welfare" argument appears, among other places, in the McCain-Palin campaign Web ad released Oct. 16.
The ad says, "Leading papers call Obama's taxes 'welfare' ... 'government handouts'." It says he would "raise taxes on seniors" and "hard-working families" and "give 'welfare' to those who pay none." It concludes, "Obama's not truthful on taxes."

This ad, however, is short of truthful itself.

As we've said any number of times, what Obama proposes would not raise taxes on any "hard-working families" unless they make more than $250,000 a year, a very small fraction of families. Independent analysis has shown than 95 percent of families with children would see federal income taxes go down.

As for "seniors," most of them would not see any increase in their federal income taxes either. In fact, Obama proposes to reduce federal income taxes to zero for persons 65 and over who make less than $50,000 a year. No other seniors would see an increase in what they pay to the IRS unless their income is $250,000 for a couple, or $200,000 for a single filer. It's true, as the McCain campaign likes to point out, that seniors who make less would be adversely affected by Obama's proposal to close down billions of dollars in tax preferences for corporations, which independent analysts calculate would flow through to owners of stocks and bonds in the form of lower dividend payments and reduced profits from capital gains. But while experts at the Congressional Budget Office and the Urban-Brookings Tax Policy Center tally this reduced income as "tax increases" for purposes of analyzing how proposed tax policies would affect different groups, it would not show up as an increased tax bill for any individual taxpayer, whatever their age.

"Welfare" or "Reform"?

The "welfare" claim rests on the argument, made in an Oct. 13 editorial in the Wall Street Journal, about refundable tax credits. Obama proposes to grant a number of refundable tax credits to low- and middle-income workers. For example, he would give a $500 tax credit ($1,000 for a couple) for workers, which would phase out for single workers making $75,000 or for couples making $150,000 per year. As the Journal editorial says: "You can receive these checks even if you have no income-tax liability." That's true enough. Whether or not that makes them "welfare" is a matter of interpretation, however. As the Journal editorial also says in its headline, "It depends on what the meaning of 'tax cut' is."

Fair enough. But McCain himself is proposing refundable tax credits of up to $2,500 a year for individuals, or $5,000 for families, as part of his health care plan. McCain doesn't call his credits a "tax cut" but he doesn't call them "welfare" either. He does call it tax "reform," right there on his own Web site:
McCain Web site: John McCain Will Reform The Tax Code . . . [E]very family will receive a direct refundable tax credit - effectively cash - of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Read more

See a side by side comparison of Obama and McCain's tax plans.

Obama Tax Cut Calculator

How much of a tax cut will you get under an Obama administration? This is a brilliant way to illustrate what Obama's tax plan means. The calculator was created by Alchemy Today.
This neato calculator by way of Daily Kos.

Biden on Tax Facts in Missouri

As only Joe could say it:

Economic History Favors Democrats

This is becoming more apparent as the rich folks forget how many houses they own and the rest of us scramble to pay for milk and gas. You can't expect to keep giving tax cuts to the wealthy in hopes they'll create jobs and pass it down. The wealthy know tax loopholes and how to make more of their money anyway.

NYT: CLEARLY, there are major differences between the economic policies of Senators Barack Obama and John McCain. Mr. McCain wants more tax cuts for the rich; Mr. Obama wants tax cuts for the poor and middle class. The two men also disagree on health care, energy and many other topics.

Such differences are hardly surprising. Democrats and Republicans have followed different approaches to the economy for as long as there have been Democrats and Republicans. Longer, actually. Remember Hamilton versus Jefferson?

Many Americans know that there are characteristic policy differences between the two parties. But few are aware of two important facts about the post-World War II era, both of which are brilliantly delineated in a new book, “Unequal Democracy,” by Larry M. Bartels, a professor of political science at Princeton. Understanding them might help voters see what could be at stake, economically speaking, in November.

I call the first fact the Great Partisan Growth Divide. Simply put, the United States economy has grown faster, on average, under Democratic presidents than under Republicans.

Income inequality doesn't pay.

It is well known that income inequality in the United States has been on the rise for about 30 years now — an unsettling development that has finally touched the public consciousness. But Professor Bartels unearths a stunning statistical regularity: Over the entire 60-year period, income inequality trended substantially upward under Republican presidents but slightly downward under Democrats, thus accounting for the widening income gaps over all. And the bad news for America’s poor is that Republicans have won five of the seven elections going back to 1980.