Posts Tagged ‘tax credits’

Ron Paul’s Tax Credit Misnomer

March 12, 2009

What? Ron Paul not making any sense? Now I have heard everything. The video is from a recent appearance on Neil Cavuto’s show. The main argument of the segment was earmarks. Earmarks are indeed a problem with Members of Congress; they can’t help themselves with their pet projects. There is an old saying that goes “The road to hell is paved with good intentions.” Well, it is very true for earmarks. When legislation was passed, congress had no way to see how the oney they just appropriated was being spent, and often, it was not being spent the way they wanted it to be (shocking, I know). So they decided that the best way to have the money spent where they wanted to be was to put it into legislation and thus, earmarks were born. I am not talking about earmarks though.

No, I am talking about one little quote by Ron Paul at around the 2:00 mark. Where he says that he does not vote for appropriations bills, but he does vote for tax credits. That way he can get “more money back to the people”. Sounds nice. However, it is wrong. You see, if Dr. Paul votes for tax credits, he is voting for more government spending. According to Brookings and the Urban Study Center (neither is a friend to conservatives)

The press has widely reported that the difference between Senate and House stimulus bills is mostly about tax cuts (Senate) versus spending (House).  That’s wrong.  The main difference is about who runs the spending programs-the IRS or program agencies

The Heritage Foundation states:

This kind of credit is actually a spending program because it directs money to a targeted group based on political considerations. Economically, it is no different than if Congress passed a spending bill that simply sent checks in the same amount to the same people. The only difference is that it is run through the tax code.

The Tax Foundation, an organization dedicated to letting people have the most of their money as possible says this about Tax Credits:

While some might consider this a wise compromise, it is not the best solution for from an economic perspective. There is no way hold businesses harmless through tax credits from a minimum wage increase; nor is it equitable to provide tax credits to some businesses that employ minimum wage workers and not others. Targeted tax credits simply cannot accomplish the stated goals and they have a number of negative consequences for the overall economy.

So, it seems that everyone is in agreement that tax credits are spending under a different name. But somehow, Dr. Paul votes for tax credits and votes against spending. Things aren’t adding up here.

Todd Thurman