National Journal Hotline
OBAMA II: The Prince Of Welfare?
Many conservative bloggers are arguing that Obama’s proposal to cut taxes for 95% of Americans will result in welfare for Americans who don’t pay income taxes. Wall Street Journal columnist Kimberley Strassel recently made this argument:
“…Mr. Obama will give 95% of American working families a tax cut, even though 40% of Americans today don’t pay income taxes! How can our star enact such mathemagic? How can he ‘cut’ zero? Abracadabra! It’s called a ‘refundable tax credit.’ It involves the federal government taking money from those who do pay taxes, and writing checks to those who don’t. Yes, yes, in the real world this is known as ‘welfare,’ but please try not to ruin the show.”
- NRO‘s Cliff May: “OK, so we all know that taxation without representation is a form of tyranny. But as Kimberly Strassel and others have been pointing out, ‘40% of Americans today don’t pay income taxes.’ What if, not implausibly, in the next administration that number rises to 51% or more? At that point, the majority of Americans not paying taxes would elect leaders who decide how much the minority must fork over to the government — to be redistributed to the majority through government programs and services. A majority of American would enjoy representation without taxation. This is probably not a form [of] tyranny that [Thomas] Jefferson, [James] Madison,[Benjamin] Franklin et al. envisioned.”
- NRO‘s Andy McCarthy: “Cliff, I actually think it’s exactly the form of tyranny the Founders feared. As an increasingly sizable majority pays no taxes, the minority’s representation becomes ever more illusory. The minority will be taxed, its property rights will be eroded, and it will have no meaningful say in the matter. A tyrant is a tyrant, whether he’s a king or a block-voting majority of dependents. As Obama and his ACORN friends used to say when he was a community organizer signing up half of Chicago, ‘It’s a power thing.'”
Liberal bloggers are rebutting this argument by pointing out that “a worker can be a ‘taxpayer’ whether or not they owe any income tax”. Obsidian Wings‘ hilzoy writes: “How can you cut taxes for people who pay no income taxes? Magic? Welfare? Or maybe — just maybe — people who pay no income taxes pay some other kind of tax. I know, I know: how could there be any sort of tax other than the (federal) income tax? I have heard that in distant lands there are strange, exotic taxes, like the ‘sales tax’, the ‘property tax’, ‘state and local income taxes’, the ‘capital gains tax’, ‘use taxes’, ‘permit fees’, other fees, the ‘severance tax’, the ‘occupational privilege tax’, the ‘estate tax’, the ‘gift tax’, the ‘federal excise tax’, and even the fantastically named ‘generation skipping transfer tax’. But surely we have no such outlandish customs here! We who live in a country that has only one sort of tax, the federal income tax, can only stare in wonder at those benighted countries where people actually pay taxes whenever they buy a shovel or realize capital gains. Oh. Wait.”