New Report: 70 Percent of Families Will Receive More Benefits Than They Pay in Taxes Under Obama Plan

New reports from the Tax Foundation show that President Obama’s policy proposals will increase the financial dependence of middle-income Americans on the federal government.

Specifically, by 2012, if President Obama’s proposals on taxes, health care and climate change become law, 70 percent of American families will, as a group, be receiving more in federal spending than they pay in federal tax.

Currently the bottom 60 percent of the income spectrum receives more in federal spending than they pay in federal taxes.“Attempts to put ‘price tags’ on health care and cap-and-trade proposals vary among government agencies and think tanks,” said Tax Foundation President Scott Hodge, “but one vital question has been left unanswered: Counting all federal taxes and spending, how would these policies affect American families’ financial ties to the government? The foundation’s new ‘fiscal incidence model’ answers that question.”

 

“Currently the bottom 60 percent of the income spectrum receives more in federal spending than they pay in federal taxes,” said Hodge. “By 2012, if President Obama’s proposals on taxes, health care and climate change become law, 70 percent of American families will, as a group, be receiving more in federal spending than they pay in federal tax.”

In fiscal year 2010, the lowest-income families will receive $10.44 in federal spending for every dollar in taxes they pay. Middle-income families, who are the targeted beneficiaries of many Obama policies, will receive $1.15 in government spending benefits for every dollar they pay in taxes.

The Tax Foundation also reported:

When only taxes are analyzed, Obama’s policies lead to tax increases for a curious mix of rich and poor families. Families earning less than $23,700 are disproportionately affected by regressive cap-and-trade policies and higher tobacco taxes, and those earning more than $280,000 will see their tax payments go up because of higher income tax rates. On net, however, when spending is included, the lowest-income households gain more than $2,200 while the highest-income families lose more than $127,000.

You can see the full press release from the Tax Foundation HERE

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