Obama's tax cut is really not a tax cut

Many who read this - Democrats, liberals, and Republicans - who voted for Obama will not believe me when I say that Obama's tax cut really isn't a tax cut.

I don't want you to.

Find out for yourself. Ask your accountant, tax lawyer, or anyone familiar with the tax system. Here is what is going to happen on April 15, 2010. If you are going to get a refund it will be $400 less than what you would have got. If you are someone who always ends up sending a check, you are going to pay $400 more. That's because the tax cut has to be paid back.

The Obama tax cut is not a change in the marginal income tax rates. That would work like this. Suppose your tax rate is 10 percent and you earned 10,000. You would owe $1,000 in taxes.

But suppose the tax rate was decreased to 5 percent, then you would only owe $500.

The Obama tax cut is also not a credit even though it is called one in the law.

A tax credit is applied dollar for dollar against tax liability. Suppose after you do your taxes, you owe $1,000, but you are entitled to a $400 tax credit. Then your tax liability is only $600.

Obama's tax cut does not do either of these. All that is happening is that the IRS is taking less money out of your paycheck than they usually do, $400 less spread out over 9 months to be exact. But one way or the other you are going to have to give it back on April 15, 2010. Don't believe me, check it out for yourselves, maybe I am missing something.

John Strzelecki

Mount Prospect