McSame's Tax Cut and Palin Pipeline Myths

The Washington Post published a chart that was widely circulated showing the difference in the tax cuts or increases between the Obama and McCain Tax Proposals.

On it's face, it shows how McCain's plan gives huge breaks to the wealthy, while Obama's gives bigger breaks to the up-to-$111,645 income taxpayers. But this chart doesn't really tell the true story because the bottom two-thirds of the population are given only a third of the space on the graph, while the top 0.1% of the population - one in a thousand people - gets almost 10%.

Thanks to the blog site chartjunk, here is the weighted chart giving a truer picture of the tax plans:

This weighted chart factors population distribution which depicts even more clearly that Obama's tax plan is the most beneficial to two-thirds of the population.... lower and middle class taxpayers.

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And, while we're on the subject of clearing up the record, let's address the outsiders-against-greed-and-corruption campaign blather about "maverick" Palin's touted Alaska pipeline.

As spelled out in "Palin pipeline terms curbed bids" (AP-USA Today) "Gov. Sarah Palin's signature accomplishment — a contract to build a 1,715-mile pipeline to bring natural gas from Alaska to the Lower 48 — emerged from a flawed bidding process that narrowed the field to a company with ties to her administration, an Associated Press investigation shows.

"Despite Palin's boast of a smart and fair bidding process, the AP found that her team crafted terms that favored only a few independent pipeline companies and ultimately benefited the winner, TransCanada Corp.

"And contrary to the ballyhoo, there's no guarantee the pipeline will ever be built; at a minimum, any project is years away, as TransCanada must first overcome major financial and regulatory hurdles."

And, just what kind lobbying influence was at play?...."The leader of Palin's pipeline team had been a partner at a lobbying firm where she worked on behalf of a TransCanada subsidiary. Also, that woman's former business partner at the lobbying firm was TransCanada's lead private lobbyist on the pipeline deal. Plus, a former TransCanada executive served as an outside consultant to Palin's pipeline team.

"Under a different set of rules four years earlier, TransCanada had offered to build the pipeline without a state subsidy; under Palin, the company could receive a maximum $500 million."

Does this sound like a reformer?.... an outsider who will come down hard on lobbyists and insiders, a maverick who will cut costs? And, Palin's fellow "maverick" McCain has a campaign, Senate office staff and policy advisers rife with lobbyists or former lobbyists.

The "maverick" campaign lingo is just more Rovian McSame-Bush say anything truth-be-damned tactics.

They're aimed at trying to convince the majority of Americans who think the country is going in the wrong direction that the McSame ticket is the agent of change.... to once again lure them with empty words to vote against their own best interests when in fact the McCain-Palin ticket is intent on continuing The Decider's power-grabbing corporatist ways.

Vote! It matters!

The Meaning of "Refundable" Is...

Not all tax credit "refundables" are created equal.

Yesterday's Wall Street Journal took after Barack Obama's tax plan as a handout, regardless of taxes paid, to lower-income taxpayers. They say in "Obama's 95% Illusion"...

"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' ..."

Well now, wouldn't it be a crying shame if it were "welfare" in view of the fact that investment banks, mortgage companies and banks have just been granted $1 trillion+ in corporate welfare, on top of the already obscene corporate tax breaks for everything imaginable including shipping jobs offshore.

However, this WSJ analysis is very misleading. Obama's plan isn't welfare. Here's why, as shown in one of Obama "refundable" plans taken from his official website:

"A $1,000 "Making Work Pay" Tax Credit. For 95 percent of workers and their families-150 million workers overall-the "Making Work Pay" credit will provide a refundable tax cut of $500 for workers or $1,000 for working couples. This credit will benefit over 15 million self employed workers and for 10 million low-income Americans, will completely eliminate their federal income taxes."

As you can see, it doesn't say anything about giving taxpayers back more than they paid in taxes.... "will completely eliminate their federal income taxes".... it is meant to be a "tax cut" refundable directly against the amount of taxes to be paid.

Many times a "tax credit" is a formula that doesn't go directly to the bottom line but, for example, is applied to earned income subject to tax. What Obama means by "refundable" in this context is that it isn't a formula tax credit, but a credit to be applied directly to help "eliminate federal income taxes."

Now, let's take an example of John McCain's "refundable" tax credit from his official website....

"John McCain Will Reform The Tax Code To Offer More Choices Beyond Employer-Based Health Insurance Coverage. While still having the option of employer-based coverage, every family will receive a direct refundable tax credit - effectively cash - of $2,500 for individuals and $5,000 for families to offset the cost of insurance. Families will be able to choose the insurance provider that suits them best and the money would be sent directly to the insurance provider. Those obtaining innovative insurance that costs less than the credit can deposit the remainder in expanded Health Savings Accounts."

McCain's tax credit is "refundable" yet goes directly to the insurer. As the wording says.... "effectively cash".... or cash out in the ether somewhere, with the credit going directly to insurance coffers.

And, image finding "innovative" insurance for a family that costs less than $5000 a year. Even if you could, the difference still isn't given to the insured, but is deposited in accounts. McCain's "direct refundable tax credit" never directly touches taxpayers hands.

On top of the never-to-be-directly-seen McCain tax credit boondoggle for insurance companies, McCain's proposal calls for employer insurance benefits to be taxed as income.

So, it's McCain who has the "Washington-speak" direct refundable tax credit, and Obama who is offering the actual tax cut... as a credit against taxes due.

It all depends on what the meaning of "refundable" is.

November 4.