Obama plans to kill middle-class tax credit

According to The Hill, President Obama is not into Making Work Pay anymore:

Grappling to contain record deficits, President Barack Obama is seeking to end a middle-class tax break he once said would be permanent.

The $3.8 trillion budget request rolled out by the White House on Monday would renew the Making Work Pay tax credit for fiscal 2011, but then would have it sunset.

That’s a switch from last year, when Obama’s budget called for making the tax credit permanent.

The cut costs the federal government about $63 billion in annual revenue while putting up to $400 in the pockets of workers making less than $95,000.

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Of course, the Obama budget is not “grappling” with record deficits so much as creating them. But it is hard to fault Walter Alarkon for that poor word choice when other establishment media (e.g., ABC News and CQ) are spinning this as Obama extending the credit for a year — despite the fact that last year’s budget called for making the it permanent.

In last week’s State of the Union speech, Obama bragged about cutting taxes for 95 percent of working families. Thus, by Obama’s own logic, he can now be accused of raising taxes on the middle-class. However, we should remember that technically, this refundable tax credit sent money directly to people who pay no income taxes. Obama promised “tax cuts,” but they were often outright transfer payments.

This particular credit was also a bit of a political embarrassment to the administration. The Making Work Pay tax credit may have been incorrectly administered to more than 15.4 million people, a large number of whom could find themselves forced to return portions of it, and even owe tax penalties. Even people getting the credit may not shed tears over its disappearance next year.

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As King Banaian noted in passing while I was writing, the proposed axing of this tax credit is a timely reminder that — as Jim Geraghty famously remarked — all of Barack Obama’s statements come with an expiration date. All of them. It is also a reminder of how Obama views taxation — as something on which the government has first claim, to be redistributed or reclaimed at his whim.

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David Strom 10:40 AM | May 10, 2024
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