Tax Cut? More Like A Handout.

Unless you’re a Bright House subscriber awaiting the return of WISH-TV and WNDY-TV to your channel lineup, or lived under a rock like Patrick the Starfish in SpongeBob Squarepants then you’ve endured the spamming of airwaves with ad after ad after ad after ad about a “Tax Cut for the Middle Class”.

The Wall Street Journal has an excellent piece about this “Tax Cut for the Middle Class”. Here’s one piece that I find interesting:

“A “clean car” tax credit of up to $7,000 on the purchase of certain vehicles.”

Clear car tax credit? I take my diesel truck to Mike’s Carwash regularly so it’s clean does that count??

(See my logic below the fold)

Up to $7000 on purchase of certain vehicles? Sounds like Washingtonianewspeak for “Hybrid”. By the way, what about the environmental impact of huge lead-acid batteries once they lose effectiveness on these hybrids? You trade one environmental “hazard” for another. Anyway…….

Looking at Ford’s website and checking local automotive inventory - Capitol City has one hybrid in stock. An Escape Hybrid. List price - $29K. Plus 7% sales tax makes it $31030. Dealers fees and BMV fees will put it to $32K. So assuming you have “good” credit and plan to carry this loan for the typical 5 years. Interest rates are varying depending upon vehicle - vehicles that sell less (like my F-250 diesel) have 0% while “in-demand” vehicles like hybrids have higher finance rates. So let’s assume 7.5%.

$32,000 x .075 x 5 = $12,000 in interest charges.

So in order to receive a $7000 one time tax credit, you must spend $37,000 over 5 years. That is of course if you even “pay” $7000 in taxes in the first place [though witholdings or estimated payments]. Most “middle class” folks I’ve known don’t. I know I don’t. And I consider myself smack in the middle of “middle class”.

You can read the rest of the article to see the other parts of this “Middle Class Tax Cut”. Which is really just payoffs as one doesn’t need to pay taxes in order to receive these. Or as I like to call it - legalized vote buying. $4000 tax credit towards tuition at a college / university. What does that pay for? Two credit hours these days? Expansion of EIC and Child Care tax credits. How about getting taxes cut to where both parents don’t need to work to make ends meet? The WSJ article puts it best:

“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,” or in George McGovern’s 1972 campaign a “Demogrant.”

This is nothing more than “more of the same” pieces of social engineering that socialist liberals foisted upon the people. The grandest piece of social engineering ever concocted by the US Government - The Internal Revenue Code.