95% tax cut one-third of all filers – have no tax liability

Obama says he will give 95 percent of all American workers a tax cut but does not mention that his plan would send checks to tens of millions of tax filers who pay no personal income taxes – payments that critics say look “suspiciously like welfare.”

Mr. Obama’s campaign promise, which he has repeated in his speeches and in the presidential debates, stems from his “Making Work Pay” tax cut that will give a $500 refundable tax credit to every worker or $1,000 to each working couple. But because this provision in his economic-recovery plan is “refundable,” a large number of middle- to lower-income workers who have no income-tax liability after taking tax credits and deductions the that Internal Revenue Service allows, will be given the equivalent of the tax cut in the form of direct payments from the U.S. Treasury – funded by higher-income taxpayers.

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