Here is a fresh look at the Obama tax plan:

http://online.wsj.com/article/SB122385651698727257.html

-------------------

- 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.
--------------------

Meanwhile, Obama would punitively tax high income earners, thus encouraging
those people to 1. hide their income 2. move out of the country, or 3. not
earn so much money.

All in all, his plan is a recipe for a sipral into economic malaise for
years to come.


On Wed, Oct 15, 2008 at 3:12 PM, Gruss wrote:

>
>
> This country was on the very tipping point systemic failure 2 weeks
> ago and all that's happened since then is that a slight wind has given
> us enough balance to stay on the edge.
>


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