William McGurn of the Wall Street Journal explains the accounting shell game of the Barack Obama tax plan. Hereâ€™s how it will work:
Under Obamaâ€™s tax plan, 44% of Americans will owe no income taxes but many will get a â€œtax cutâ€ anyway. Meaning theyâ€™ll get more back from the IRS than they put in.
But Obamaâ€™s campaign says this is not wealth redistribution because they are actually giving these people back a portion of their payroll taxes (i.e. Social Security). O.k. But wouldnâ€™t that defund Social Security? No, Obama says, because the money wonâ€™t come out of Social Security. It will come out of â€œgeneral revenues.â€ And where do those general revenues come from? Other Americans who are not so fortunate as to be on the receiving end of Obamaâ€™s largesse.
Catch all that?
What irritates me is not so much the redistribution of wealth. I think thatâ€™s an ultimately self-defeating principle, but I understand that the economic impact of such a plan is debatable and that a lot of people believe such direct movement of funds from the rich to the not-so-rich is a morally preferable way to manage a society. Iâ€™d rather we invest in programs that create opportunity instead of just shuffling money around, but if Iâ€™m on the losing end of that debate, so be it.
What irritates me is the chicanery in the way Obama has structured his plan, as if to hide the true nature of his proposal. If he wants to directly transfer money from one group to another (rather than investing that money in services or programs), he should just say so. Heâ€™s being deceptive to claim heâ€™s actually refunding Social Security taxes while taking the funds out of general revenues.
I know politicians finagle language and obfuscate intentions all the time. But I never like it. And I wish Obama wasn’t doing it with his tax plan. Iâ€™m not saying heâ€™ll lose my vote over it, but he sure isnâ€™t doing much to win it either.