95% Tax Crud

Obama says he will cut taxes for 95% of working families.

"But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all?"

It's not a tax cut, it's a tax credit. Refund checks will be issued to people even if they pay no income tax at all.

"In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare,"..."

"The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation's Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS."

"The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare."

Read the whole thing.