Obama's 95% Illusion

Editorial - October 13th, 2008 - Wall Street Journal

For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit." Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals . . .

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The total annual expenditures on refundable "tax credits" would rise over the next 10 years by $647 billion to $1.054 trillion, according to the Tax Policy Center. This means that the tax-credit welfare state would soon cost four times actual cash welfare. By redefining such income payments as "tax credits," the Obama campaign also redefines them away as a tax share of GDP. Presto, the federal tax burden looks much smaller than it really is.

Actually it does not "look" smaller. It is simply possible to defend campaign promises as reducing tax burden while increasing the welfare state. As it always does, it will also increase the tyranny state. The American tyranny practiced by Bill Clinton of threatening criminal prosecutions for failure to meet government goals for bank lending to minorities is about to get much much worse.

One of the ironies of this is that most big corporation executives love the socialism state since it eliminates competition from small business, which is usually the major threat to their profits. They will be the major targets of the welfare state that they are currently promoting just as they were under Clinton.

The two parties have morphed into the Wall Street Party of big business, Democrats . . . and the Main Steet Paty of small business, Republicans. However most Republicans have not caught up with this yet.

The result, as noted in this article, "One mystery -- among many -- of the McCain campaign is why it has allowed Mr. Obama's 95% illusion to go unanswered." This is a good summation of our current problem. I fear getting an answer will have to await a future campaign against the welfare state that may well be too late.