When is a tax cut not a tax cut?

The answer is, of course, when your name is President-elect Barack Obama.  He claims that part of his stimulus package is to offer tax cuts to middle class workers and business owners.  Russel Roberts, in Cafe Hayek, points out:

The payroll tax credit is a rebate of payroll taxes for low-income workers. As faithful readers of this blog surely know, an increase in spending coupled with lower tax collections is an INCREASE in taxes. AN INCREASE in taxes. NOT A TAX CUT. If I spend more money and collect less, the government is promising to collect more taxes in the future. It is not a tax cut. Not a tax cut. Not a tax cut. And when you don’t cut rates but rather give people a lump sum of $500, there are no incentive effects other than to increase the probability that the US Treasury will be unable to honor its obligations in the future.

If I steal $10 from you and give you back $5, I still have stolen a net $5 from you…  and Obama expects us to get excited about his “stimulus” plan?

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