Monday, October 20, 2008

Obama's 95% Illusion Revisited

In a previous post, I debunked the Wall Street Journal's attempt to say that it is an only an "illusion" that 95% of workers would get a tax cut under Obama's plan.

The WSJ suggested that tax cuts that come in the form of tax credits shouldn't count as tax cuts for people who don't pay income tax, even though those people do pay payroll and other taxes. I rejected this as an arbitrary and senseless definition of "tax cut."

The fact checking site Politifact, however, points out that if you play the WSJ game and only count tax cuts among those who pay income tax, you find that 92% of those workers would get a tax cut under Obama.

3 comments:

scottwww said...

That doesn't add up to 95% of Americans getting a tax cut. It would be a far smaller number (even if you were looking at the less taxes being paid because incomes are less in Obama's world, meaning that everyone pays less to taxes because of it).

Don Pedro said...

Scott,
You should click through to the Politifact link (or to the link in my original debunking of the WSJ article).

They explain that data from the Tax Policy Center does in fact confirm that 95% of workers (or "working families," as Obama says) would get a tax cut under his plan.

You do get a smaller number--81 percent of tax filers--if you include people not working. This includes people who are unemployed, retired, and students.

Regarding the second part of your comment, I expect incomes to be higher in "Obama's world," relative to the counterfactual of a McCain presidency.

Chris said...

Would I be correct in saying that Obama never said he would cut income taxes on 95% of working Americans? He said he would cut taxes on 95% of working Americans. This distinction would take care of the "X percent don't pay income taxes, so how can he cut them" argument. Correct?