Sunday, October 21, 2012

The Obama Administration's Tax Plan Scam

    President Obama and Vice President Joe Biden can hardly make it through a speech these days without mentioning Mitt Romney's "$5 Trillion Tax Cut."  They've continued the full court press on this issue despite the debunking of the claim by Politifact ("half true" rating) and other fact checkers the Obama campaign has been quick to cite in the past for support on other issues.  (I guess they've decided that their campaign won't be dictated to by fact-checkers.)  But what about the President's tax plan?  Is all the bluster about Romney's $5 Trillion a case of deliberate misdirection?  A closer inspection of at least one of the claims of the president's tax plan would suggest the answer is yes.

    One of the most prominent claims of the Obama campaign on the tax issue appears in bold type on the website:

    Indeed, using the handy tax-calculator on the same page produces these results:

    The White House website repeats the $3,600 savings on its list of 11 Facts in the Tax Debate:
Over the past 4 years, a typical family making $50,000 a year has received tax cuts totaling $3,600—more if they are putting a child through college.
    Since the $3,600 figure keeps popping up, it must be well documented, right?  Clicking on the "Learn More" link brings up the following fact box:

    And there it is, the first bullet point.  The $3,600 saved during the president's first term comes from $1,600 from the Making Work Pay Credit and $2,000 from the payroll tax cut.  But now, before we get to reconciling how a savings of $3,600 over Obama's first four years translates into a "continued tax savings of $2,200 [$2,168 rounded up]" in 2013, how about that payroll tax cut?  I guess this means the Obama administration is seeking to extend that 2% cut for another year?  Not so fast.  The last official word I can find from the administration on the payroll tax holiday was in September from Jay Carney:
MR. CARNEY:  The payroll tax cut originally and through its extension was a temporary measure.  And as you know, when it comes to the middle-class tax cuts, the President believes we should make them permanent -- on the so-called -- the tax cuts under President Bush for the middle class, for the 98 percent.
The payroll tax cut was a temporary measure, and we’ll evaluate the question of whether we need to extend it at the end of the year when we’re looking at a whole range of issues, obviously, that will need to be worked on to ensure that we continue the progress that we’ve made.
    In other words, the payroll tax holiday is NOT included in the "continued tax savings of $2,200" in 2013, because the Obama campaign has been using these figures for months.  So if our typical family making $50,000/year is facing a $1,000* increase (2%) when the payroll tax holiday expires, how in the world does the Obama team come up with $2,200 in savings, which, figuring in the $1,000 payroll tax increase, means a $3,200 savings in other taxes?

    The Obama campaign has some serious explaining to do.  On its face, the claim is ludicrous.  President Obama has saved the average family $3,600 in his first four years, but in 2013 the same family will reap a windfall of $3,200 in non-payroll tax savings?  In the spirit of "Romnesia," I submit that the calculations for the president's tax plan must have been done using "Obamathematics." (Also in the spirit of "Romnesia", "Obamathematics" is not original with me, either.) The president and his campaign must be held accountable for this farfetched claim aimed at hoodwinking the middle class.

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*In a scamlet within the larger scam, when the Obama administration was pushing for the payroll tax holiday to be extended in 2011, they were making the claim that "President Obama's payroll tax cut... puts $1,500 in the pockets of the typical middle-class family." But the New York Times in an article just a few weeks ago confirmed that "the typical American family had $1,000 in additional income from the lower tax."  Obamathematics!

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