President Barack Obama, in his state of the union address, said:
Let me repeat: we cut taxes. We cut taxes for 95 percent of working families. We cut taxes for small businesses. We cut taxes for first-time homebuyers. We cut taxes for parents trying to care for their children. We cut taxes for 8 million Americans paying for college. As a result, millions of Americans had more to spend on gas, and food and other necessities, all of which helped businesses keep more workers. And we haven’t raised income taxes by a single dime on a single person. Not a single dime.
These are NOT tax cuts. A tax cut is when the amount you have to pay is lowered - when you get to keep more of what you earned.
These are tax credits - and are called such in all the legislation. The government collects the tax from you and then disguises their handout as some sort of giveaway you're supposed to be grateful for - but only if you happen to be in the particular group whose votes their trying to purchase.
Under the tax credit concept, the amount you owe is set and then the loving politicians who just want to take care of you graciously allow you to deduct from the amount certain dollars as a reward for the behavior they want to encourage.
How magnanimous of them!
The Wall Street Journal recognized this during the 2008 campaign:
But how does he conjure this miracle, especially since more than a third of all Americans already pay no income taxes at all? There are several sleights of hand, but the most creative is to redefine the meaning of "tax cut."
For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase "tax credit."(emphasis added)
If they'd actually cut taxes, you'd have more money to spend on the things you want rather than the things they want. If it was a true tax cut, it wouldn't matter how you spent the extra money, but with a 'credit' you're just following their dictates on how you should spend your limited dollars.
Then there is the little twist in the statement that few actually catch. Obama says he did this for "95% of working families." Here's the twist: 95% were eligible. He has no idea if 95% actually were able to take advantage of the credits because most of them haven't filed their taxes yet!
The only way the government will know how many families got their so-called 'tax cut' is when they analyze the tax returns to see the actual number who list the credits on their forms.
I'm pretty certain that 95% of those eligible didn't take advantage of all three 'cuts' he mentioned. In fact, I'd wager that less than 50% of 'working families' took advantage of the first-time home buyer credit - maybe even less than 25% because most people in that category already are in homes.
This is just another lie presented in the worst of ways to make you think you've gotten something you really haven't.
The problem is, though, that most people won't make the distinction between tax 'cut' and tax 'credit' and will never know the truth.