Obama - The Numbers Don't Lie On Your Rebate

Before starting let it be made clear I fully understand and support to assisting those of less means. They are fellow humans. Those of us of more means should extend a hand to them. What I am outraged with is the system is broken because of just throwing cash out and not really helping these people with real programs.

Let us meet the fictitious gentlemen of John Doe of Anytown, Indiana. John is a single parent with two young children. He works for Ajax Disk Company. He earns $20,000.

Mr. Doe can obtain what is called “Section 8” housing. This is a government SUBDIZED program to assist those of low income with housing. Depending on where Mr. Doe elects to live this assistance could be valued up to about $225 a month. This represents $2,700 in assistance SUBDIZED by taxpayers.

Mr. Doe can take part in Indiana’s health insurance program for a $54 a month. This would offer him full coverage of himself and his two children. The taxpayers pick up the remaining cost. The total cost to Mr. Doe is $648 a year. Those of just slightly more in incomes, purchasing the same policy via their employer, would pay about $1750 a year out of their paychecks. This is based on the employer paying 75% and the employee paying 25%. The taxpayers are SUBDIZING Mr. Doe insurance coverage by $1,102 a year.

Mr. Doe may also qualify for some amount of Food Stamps and Low Income/Free Lunch program for his children during the school year

Mr. Doe pays income tax, Social Security tax, and Medicare tax every paycheck during the year. He would see no more then $2,500 in federal taxes withheld, $1,240 withheld for social security, and $290 for Medicare taxes.

The end of the year comes and it is time to do Mr. Doe’s taxes. Using the Deluxe Turbo Tax 2007 software his tax returns where completed.

On line 24 Mr. Doe qualifies for the standard $7,850 deduction. This reduces his taxable income to $12,150 for line 25. Line 26 calls for a reduction of $3,400 per person claimed. This provides Mr. Doe with an additional deduction of $10,200. The results in Mr. Doe of having a taxable income of $1,950 on line 27.

Line 38 is the amount of federal taxes Mr. Doe paid, which was $2,500. He also qualifies for an additional child tax credit of $1,238 on line 41. Line 42 totals the tax credits and in the case of Mr. Doe, it comes to $3,738.

Bases on his adjusted income of $1,950 Mr. Doe will have no Federal Tax obligation. Hence, the IRS will send Mr. Doe a check for $3738. That is $1,238 SUBDIZED by other taxpayers.

Using Barack Obama’s tax rebate calculator Mr. Doe will also receive $1,379 check SUBDIZED BY other taxpayers.

The point is Mr. Doe is not “getting his own money back” as he already got that back and dipped into other taxpayers’ pocket when he received his $3,738 check. Now he is taking a second dip to the tune of $1,379.