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Kevin I really like you and your sweet family. I don't want to ruin that with our differences. I am sorry but I feel strongly about these things. I really like you guys.

I hope you understand that it is nothing against you at all.

Political stuff can be tricky and hard to talk about when people see things very differently. I think it is best to not get in an argument with people you really like and care about.

I tend to get upset and say things I shouldn't so I am avoiding it completely because I value our friendship.

I feel strongly about what's verifiable as true, but who is arguing here? I was just commenting on your thread explaining why your taxes went up slightly. It is a common question this week. All of us have enjoyed really low taxes the past four years because of Obama's tax cuts, and many of us forget that. This is an incontrovertible fact and I was just reminding everyone about this. So why fear the truth, or why suppress it? It makes no sense to me.

If you're hell bent on hating Obama then there are other things he can be criticized for, but raising taxes on the working class just isn't one of them.

If you have absolutely no tolerance for a different viewpoint, then there is really no point here. So just go ahead and delete me from your list. My radical Right Wing mother did the same thing two years ago. It is getting downright scary how intolerant the "conservative" Right has become nowadays.

I then pointed out that our payroll taxes went up just 2% because the 2% cut, implemented by Obama a few years ago, had just expired. I also pointed out the tax credits Obama extended, which he also initiated, making their taxes lower than they were under Bush

I am trying to think through this remark Kevin. Obama did sign the payroll tax cut which has now expired. He also signed a beefed up college credit that is refundable for lower to middle class tax payers. That has been extended.

Kevin Graham wrote:I don't know what other tax credits there were.

Bret Ripley wrote:

Kevin Graham wrote:I don't know what other tax credits there were.

Off the top of my head, there was also the "Making Work Pay" tax credit in 2009 and 2010. This was a refundable tax credit of $400 per working individual ($800 for married/joint filers).

Kevin Graham wrote:I then pointed out that our payroll taxes went up just 2% because the 2% cut, implemented by Obama a few years ago, had just expired. I also pointed out the tax credits Obama extended, which he also initiated, making their taxes lower than they were under Bush.

Obama's 95% Illusion
It depends on what the meaning of 'tax cut' is.

One of Barack Obama's most potent campaign claims is that he'll cut taxes for no less than 95% of "working families." He's even promising to cut taxes enough that the government's tax share of GDP will be no more than 18.2% -- which is lower than it is today.

It's a clever pitch, because it lets him pose as a middle-class tax cutter while disguising that he's also proposing one of the largest tax increases ever on the other 5%. But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."

For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals:

- A $500 tax credit ($1,000 a couple) to "make work pay" that phases out at income of $75,000 for individuals and $150,000 per couple.

- A $4,000 tax credit for college tuition.

- A 10% mortgage interest tax credit (on top of the existing mortgage interest deduction and other housing subsidies).

- A "savings" tax credit of 50% up to $1,000.

- An expansion of the earned-income tax credit that would allow single workers to receive as much as $555 a year, up from $175 now, and give these workers up to $1,110 if they are paying child support.

- A child care credit of 50% up to $6,000 of expenses a year.

- A "clean car" tax credit of up to $7,000 on the purchase of certain vehicles.

Here's the political catch. All but the clean car credit would be "refundable," which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer -- a federal check -- from taxpayers to nontaxpayers. Once upon a time we called this "welfare," or in George McGovern's 1972 campaign a "Demogrant." Mr. Obama's genius is to call it a tax cut.

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. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is.

The political left defends "refundability" on grounds that these payments help to offset the payroll tax. And that was at least plausible when the only major refundable credit was the earned-income tax credit. Taken together, however, these tax credit payments would exceed payroll levies for most low-income workers.

It is also true that John McCain proposes a refundable tax credit -- his $5,000 to help individuals buy health insurance. We've written before that we prefer a tax deduction for individual health care, rather than a credit. But the big difference with Mr. Obama is that Mr. McCain's proposal replaces the tax subsidy for employer-sponsored health insurance that individuals don't now receive if they buy on their own. It merely changes the nature of the tax subsidy; it doesn't create a new one.

There's another catch: Because Mr. Obama's tax credits are phased out as incomes rise, they impose a huge "marginal" tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income.

Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of "making work pay," but in practice they can be a disincentive to working harder, especially if you're a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered.