Wash. Times' Lambro repeats false claim that some people benefiting from Obama tax cuts don't pay taxes
In a November 23 article, Washington Times chief political correspondent Donald Lambro falsely asserted that President-elect Barack Obama's tax plan would provide tax credits "to the 49 million tax filers who will owe no taxes -- a proposal his critics have compared to welfare." As Media Matters for America previously noted, all American workers are required to pay Social Security and Medicare taxes under the Federal Insurance Contributions Act (FICA). Obama's published proposal would "[c]ut taxes for 95 percent of workers and their families with a tax cut of $500 for workers or $1,000 for working couples" [emphasis added].
From Lambro's November 23 Washington Times article:
President-elect Barack Obama's economic agenda does not call for cutting the income-tax rates. Instead, he proposes a "refundable" tax credit for low-to-middle-income workers that would allow them to take $500 for individuals and $1,000 for joint filers off their tax bill. And, he would send a check for those amounts to the 49 million tax filers who will owe no taxes -- a proposal his critics have compared to welfare.
FICA (Federal INSURANCE Contributions Act), Medicare - amounts withheld from paychecks are INSURANCE premiums, not taxes. This was hammered home to me those many years ago when SS/Medicare reform were on the front burner. Funny how they have all of a sudden become taxes again. Great try, MMFA, but 49 Million tax filers pay no income taxes and many get tax credits/rebates. Spin it one way when it's to your advantage, the other when it's not.
If they pay "no taxes," then they have nothing more to get under Obama. You can't cut taxes when you don't pay them-- there's nothing to cut. This is not a tax credit. Plus your figure is ludicrous anyway.
Savvy, hombre?
My "figure" is ludicrous, but I'm working on it. Two weeks at a spa after the Holidays will make a big "change" in my ludicrous "figure."
You can only get your taxes cut if you pay taxes. For lower income people, the most they will get back is all of their payroll deductions.
It's not a tax credit, or an earned income credit, or anything like that. No one is getting a check from the govt. under Obama-- just their deductions, at best.
So-- why don't Repubs understand this? Are they liars? or just really stupid and venal?
Come on, Carlile, let Oscar enjoy his nightmares.
The progressives hammered on me (and others) during the SS reform debate, calling SS and Medicare Insurance premiums and now that the debate is going the other way, they are suddenly taxes. Who is actually doing the spinning?
There was no debate like that. Conservatives were calling SS a welfare program and we corrected them. I doubt you got any disagreement if you called SS or Medicare payroll taxes.
There were a lot of people that likened SS and Medicare to Insurance premiums. In fact, if you notice above SS is called Federal Insurance Contribution Act (FICA) and shows up that way on my pay stub (FICA). Sure, LBJ rolled FICA funds into the General Budget first in the 1960s to "hide" the true cost of that little misadventure in SE Asia (also built on a lie, as I recall). And since that time, Congress and Presidents have had no problem in borrowing against those funds to fund other government programs.
"There were a lot of people that likened SS and Medicare to Insurance premiums."
Conservatives called SS and Medicare welfare programs and we corrected by saying they were insurance programs. I don't know of anyone who wouldn't call them payroll taxes.
"Sure, LBJ rolled FICA funds into the General Budget first in the 1960s to "hide" the true cost of that little misadventure in SE Asia (also built on a lie, as I recall)."
This is the same thing Reagan did with his misadventure: taxcut for the wealthy. He doubled the SS tax and then stole from it to prop up his faltering economy.
Like it or not, if RR hadn't spearheaded FICA reform in the 1980s, the Horizon for reduced benefits would have been around now instead of 2040 +/-. And he has had plenty of accomplices in "stealing" from it, including Presidents and Congresses since the mid 60s (with maybe 2 years exception).
He did the right thing by doubling the tax; he did the wrong thing by stealing from it. No administration comes close to what Reagan and W. did to the SS fund.
The progressives hammered on me (and others) during the SS reform debate, calling SS and Medicare Insurance premiums...
Perhaps, but that has nothing to do with the getting free money argument coming from Obama critics.
When Obama cuts taxes, the only people getting the cuts will be people who are paying taxes. At best, low income people will only get back what they paid-in through payroll deductions. Nothing extra, unless Congress boosts the earned income credit, which is an entirely different thing.
It is quite possible that many more low income workers will end up paying zero taxes under Obama, but that's not the same as saying that present zero taxpayers will get extra money. They won't, but that's been the Repub argument ad nauseum.
Obama is not really clear whether this is a refundable tax credit or a non-refundable tax reduction.
If it is not a refundable credit like the Additional Child Tax Credit, then the Repugnants are incorrect. People who pay no taxes will not gain from this credit. And that includes workers who do not pay income tax because of other deductions and credits. It will only help those who do owe taxes.
Between my Railroad Retirement pension AND my job I will not make enough to owe taxes this year, so it won't benefit me at all.
As for Social Security and Medicaid - those fund the entitlements the Repugnants are always crying about and are NOT TAXES. So it is disingenuous to claim they are.
Payroll taxes do not go into special fund (or 'lock box' as Al Gore refered to the concept). They are all dumped into general revenues. Telling working people that their payroll taxes are not indeed taxes is a transparently foolish and losing proposition. People do notice that money has been deducted from their pay checks, and realize that this money is blended seamlessly in with revenues garnered through 'income taxes', and used to fund all US government expenditures. Claiming that tens of millions of workers pay no taxes if simply a bogus neans of creating a false distinction between taxpayers based on class and income.
The real question is why do consevatives so despise working people?
Telling working people that their payroll taxes are not indeed taxes is a transparently foolish and losing proposition.
For most of that 95%, it means a bigger refund, perhaps all the way to the total amount they paid in through withholding. But that's it.
Now, it's quite likely (probable?) that Obama and Congress will add an extra credit to the mix, so that really low taxpayers get the benefit of the full $500 or $1000 cut, but that's not what's been planned yet. So why the Repubs are squawking right now, and misrepresenting "taxes," who knows?