“From Each According to His Ability, to Each According to His Need”
Posted by bigliberty on October 17, 2008
A comment I posted on Michael Graham’s Natural Truth Blog:
Many of Obama’s tax cuts (I think it might be all, but I’d need to check on that) are in the form of “refundable tax credits.” That is, when you file taxes and you’re able to claim certain deductions – instead of those deductions reducing your federal tax liability possibly to zero and then not beyond that even if you have more deductions, Obama’s plan invokes the negative range.
And what are negative taxes? Essentially, welfare checks from the government.
So say you’re already not eligible to pay federal income tax, and you’ve got a child going to college full-time. You will get a check in the mail for $4000. As far as I know, this doesn’t take into account whether or not your child’s tuition and expenses were already being paid for by some other method (need-based/merit scholarships, loans, work-study, etc).
A simple observation is that this “refundable” credit isn’t a welfare check just for non-taxpayers, but taxpayers too. Since it’s not a reduction in any marginal rate, the reception of the “cut” is contingent on how many children you have, whether they’re in college, and whatever other behaviors and situations the credits are “rewarding.” The cut ostensibly awards people who send their children to college, who have children in the first place, and so forth. That is, even those who pay taxes will become dependent on these credits as the market processes their existence. The demand for college education will go up, for a start, which will send the price of tuition up.
It doesn’t take a genius to figure out that the development of a general, behavior-based welfare state is going to be phenomenally expensive. If anyone thinks simply raising the marginal rates of the upper (two? or just one? I forget) bracket(s) by a few percent is going to pay for it, they’re living in la-la land.
In conclusion, Obama’s tax cut plan is doublespeak for the institution of a general welfare state, which rewards certain income classes and certain behaviors, and punishes other income classes and behaviors. “To each according to his need, from each according to his ability.” It is the first step in the ultimate erosion of “the right to life, liberty, property, and the pursuit of happiness.”
Eema-le said
Oh…So that’s how it’s gonna work. I thought he was simply going to wave his magic wand and suddenly everyone would have free health care, college, housing, peace, love, rainbows, doves, etc. Maybe he’s just going to buy the world a Coke.
AnnieMcPhee said
We have that with the EIC; I guess this is just a lot more of it. I must say when we were younger and used to qualify for the EIC, I really didn’t understand; even though I was the one doing the taxes. It just never really registered that we weren’t getting back what we’d paid, but were not paying and getting “free” money. I also didn’t understand the obvious – punishing those who have the means to provide you with an actual job and livelihood in the long-term (to where you can rise up and end up providing your own lifestyle and helping others upwards on their path towards self-sufficiency) not only gives them disincentives to job and wealth creation, but literally in the long-term makes them unable to do so. It hurts everyone. Not to mention the price of goods and services *necessarily* goes up – for everyone. That free money is not only not free, it makes us all slaves.
AnnieMcPhee said
That said, McCain’s cuts will help (as Bush’s did) but they’re not deep and meaningful enough to make a huge 180 degree turnaround like the early Reagan era and lead to a sustained time of big prosperity. If he gets in he’s going to have to be pressed to make genuinely meaningful cuts (especially to the highest payers – which are, duh, those who make and pay the most).
But dang, I was just going to make a whole post about all that; there are just a couple things I need to research first.
Sandy said
Eama-le, priceless! My thoughts exactly.
Promise the moon and people think free stuff and get behind it, but no one stops to do the math and realize it’s as illusory as the pot of gold at the end of a rainbow.
Jessica said
Either change us to a socialist society like Sweden or let capitalism run it’s course and punish the greedy bastages who didn’t know when to stop. This half-a** socialism (corporate bailouts from the government, welfare checks that are given indirectly by the wealthy)is just going to prolong this recession.
I don’t even care if we switch to socialismat this point. Have you been to Stockholm? They don’t have slums, they don’t worry about losing their house and best of all; they get paid in proportion to their value. Imagine if all of these stupid celebrities made 1,000 an episode instead of $5,000,000 (jerry seinfeld)and teachers got paid as much as the Lawyers they taught in school. Taxes would be higher but it wouldn’t matter.
I know I’m pretty fu**ing tired of seeing these idiot fat-cats on wall street making so much money by gambling people’s insurance premiums and then walking away while leaving a trickle down effect of massive layoffs and foreclosures.