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The Truth About Barack Obama’s “Tax Cut For 95% Of Americans”

by @ 1:55 pm on April 16, 2010. Filed under Barack Obama, Economics, Politicos & Pundits, Politics

Yesterday in Miami, President Obama had this to say about the Tax Day protesters:

OBAMA: We cut taxes for 95 percent of working Americans just like I promised we would on the campaign. […] So I’ve been a little amused over the last couple days where people have been having these rallies about taxes. You would think they would be saying, “Thank you!” That’s what you’d think!

Obama’s comment, of course, ignores the massive spending and deficit increases that he’s presided over, but what about this claim that he cut taxes for 95% of Americans ?

Yea, well that doesn’t really hold water either.

First of all, the tax referred to, the Making Work Pay tax credit doesn’t amount to much of anything:

Q: What are some of the tax breaks in the bill?

A: It includes Obama’s signature “Making Work Pay” tax credit for 95 percent of workers, though negotiators agreed to trim the credit to $400 a year instead of $500 — or $800 for married couples, cut from Obama’s original proposal of $1,000. It would begin showing up in most workers’ paychecks in June as an extra $13 a week in take-home pay, falling to about $8 a week next January.

Over a 52 week year, that amounts to $ 676.00 at most.

Barely enough to make a car payment for some people.

Not enough to cover rent for most.

And the mortgage ? Forget about it.

But, wait, it gets worse, the Making Work Pay Tax Credit wasn’t really a tax cut at all for millions of Americans:

WASHINGTON (AP) — Millions of Americans enjoying their small windfall from President Barack Obama’s “Making Work Pay” tax credit are in for an unpleasant surprise next spring.

The government is going to want some of that money back.

The tax credit is supposed to provide up to $400 to individuals and $800 to married couples as part of the massive economic recovery package enacted in February. Most workers started receiving the credit through small increases in their paychecks in the past month.

But new tax withholding tables issued by the IRS could cause millions of taxpayers to get hundreds of dollars more than they are entitled to under the credit, money that will have to be repaid at tax time.

At-risk taxpayers include a broad swath of the public: married couples in which both spouses work; workers with more than one job; retirees who have federal income taxes withheld from their pension payments and Social Security recipients with jobs that provide taxable income.

So $ 13 a week and you might have to pay it back anyway.

Thanks for nothing, Mr. President.

6 Responses to “The Truth About Barack Obama’s “Tax Cut For 95% Of Americans””

  1. Frank N says:

    What kind of car are you driving?

  2. Eric F says:

    I won’t claim to be a tax expert, but both my wife and I work. I work in IT and She runs her own web design company, this is the first year we’ve gotten a tax refund since she opened for business.
    So something changed that helped us out.

  3. Robert in SF says:

    So your entire post could be summed up, using the same headline of “The Truth About Barack Obama’s “Tax Cut For 95% Of Americans”” as:

    True.

    Well, I guess you had to add some spin to it, for some reason, to place this in as negative light as possible?

    I mean, your complaint seems to hinge on the fact that the tax cuts (the ones you mention, at least) weren’t big enough. He proposed $1000 for this credit, I believe, but that was not included in the final bill.

    And his point for this part was that the Tea Partiers have a large portion of persons who don’t know their tax burden, and believe that he somehow raised taxes on them. Yet, they are 100% wrong on that count. But the spin is, he isn’t right….enough.

    Doug, please understand, I think you are one of the more “fair and balanced” political blogs I read, but the aspect to which you blame President Obama for the mistakes and travails of the earlier administrations, or for things beyond his practical control really go beyond the pale sometimes.

  4. True if you consider $ 18 a week that will end up being taxable income for most people a “tax cut”

  5. Alfred J. Lemire says:

    Does anyone on the Left think for a moment where the funds will come from to pay for the soaring spending of this Democratic Party government? It will be paid for through taxes. Does anyone seriously think that only the “wealthy” will pay for all of those commitments?

    Another source of funds for the feds: borrowed money. Higher spending, higher taxes, higher debt. That may look good only for people with a history of being high, like the President. More sober Americans worry about our quickening slide into a debtor nation with likely diminishing wealth.

  6. [...] tax credit that allows an immediate tax credit to be claimed for capital equipment purchases  Reduction in withholding  One-time $250 payment to seniors, veterans and the disabled in the 8th Congressional [...]

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