Redefining welfare
According to the Wall Street Journal, Obama is proposing a welfare program disguised as a tax cut. The trick is that the tax credits can be claimed by people who don’t pay taxes. Fill out a form, receive a check. It’s a transfer payment.
The Tax Foundation estimates that under the Obama plan 63 million Americans, or 44% of all tax filers, would have no income tax liability and most of those would get a check from the IRS each year. The Heritage Foundation’s Center for Data Analysis estimates that by 2011, under the Obama plan, an additional 10 million filers would pay zero taxes while cashing checks from the IRS.
The genius of this is that the transfer payments stay “off the books”. The books show net revenues on the income side instead of total revenues on the income side offset by the welfare program on the expense side.
Instead of a bureaucracy with case workers, the New Welfare will be administered by the IRS.