MSNBC’s Joe Scarborough went off on a tear against President Obama’s proposed stimulus plan this morning, slamming tax credits for people who, according to him, “don’t pay taxes.” “It’s not even welfare!” he shouted, and accused Obama of trying to “buy off your constituents”:
SCARBOROUGH: You’re not going to get Republicans to line up and support tax cuts for people who don’t pay taxes. That’s taking you to a position now where you have the federal government — and this is very dangerous — just writing checks to people for doing nothing. It’s not even welfare. … If you want pure straight socialism, if you want to buy off people, do that.
There are enormous problems with this analysis. First, Americans benefiting from the tax cut do pay taxes — sales taxes, payroll taxes, social security taxes — even if they don’t pay income tax. In fact, those in the lowest income bracket pay about 4.3 percent of their income to federal taxes.
The tax credit isn’t some kind of charity; it’s one of the most effective kinds of tax cuts in terms of stimulating the economy. Moody’s chief ecomomist Mark Zandi showed that the refundable tax credit gives the economy a far greater “bang for the buck” than non-refundable tax cuts, corporate tax cuts, or making Bush’s tax cuts permanent, the “solutions” proposed by conservatives:
What’s more, as Center for American Progress Action Fund President John Podesta pointed out to Scarborough minutes later, these tax cuts were something that “Barack Obama campaigned on all year long” — and he encountered the exact same fearmongering accusations of “socialism” from conservatives. If Americans didn’t support Obama’s tax plan, they wouldn’t have voted for him.