… disguised as a tax plan:
Obama’s 95% Illusion
It depends on what the meaning of ‘tax cut’ is. I was reading this in the train, and even when I don’t have much time to comment on it, it’s certainly worth reading. Money quote,
Because Mr. Obama’s tax credits are phased out as incomes rise, they impose a huge “marginal” tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned. As the nearby chart illustrates, the marginal rate for millions of low- and middle-income workers would spike as they earn more income.
Some families with an income of $40,000 could lose up to 40 cents in vanishing credits for every additional dollar earned from working overtime or taking a new job. As public policy, this is contradictory. The tax credits are sold in the name of “making work pay,” but in practice they can be a disincentive to working harder, especially if you’re a lower-income couple getting raises of $1,000 or $2,000 a year. One mystery — among many — of the McCain campaign is why it has allowed Mr. Obama’s 95% illusion to go unanswered.
On that last point, because of the McCain campaign’s incompetence.
A few minutes later,
I found the right picture for this post,