Obama's Policies Would Redistribute Nearly $1 Trillion in Wealth Every Year
September 23, 2009 - 6:39 PMBy 2012, nearly $1 trillion from the top 30 percent of American families will be redistributed among the remaining 70 percent if Obama's proposals on taxes, health care, and climate change become law.
“Even if none of Obama’s policies becomes law, the extent of income redistribution is remarkable,” Scott Hodge, president of the nonpartisan, nonprofit organization, said. “The top-earning 40 percent of families will transfer $826 billion to the bottom 60 percent in 2012.”
Under the Obama plan, 70 percent of American families as a group -- those earning less than $109,460 -- will receive more in benefits than they pay in taxes, Hodge said.
“The majority of people below the 70 percent mark will get more back than they pay in taxes,” Hodge told CNSNews.com.
This would leave the top 30 percent -- those making more than $109,460 -- paying more in taxes than they receive in federal spending, Hodge said.
According to the report, the lowest-income families will gain $10.44 in federal spending for every dollar they pay in taxes.
“Middle-income families (those earning $65,000 to $85,000 annually), who are the targeted beneficiaries of many Obama policies, will receive $1.15 in government spending benefits for every dollar they pay in taxes,” the report states.
“Under Obama’s policies, families making over $280,000 (the top 5 percent) will get back 56 cents of every dollar they pay in taxes while the highest earning families, those in the top 1 percent earning over about $700,000, will get back 33 cents in spending for every dollar they pay in taxes,” Hodge said.
Currently, families making $280,000 receive 61 cents on the dollar, while those earning over $700,000 receive about 40 cents for every tax dollar spent, Hodge said.
The report notes that “Obama’s policies (will) lead to tax increases for a curious mix of rich and poor families.”
Regressive cap-and-trade policies and increased tobacco taxes disproportionately impact families earning less than $23,700, and higher income tax rates will increase tax payments for families earning more than $280,000.
“On net, however, when spending is included, the lowest-income households gain more than $2,200 while the highest-income families lose more than $127,000,” the report states.
Hodge explained: “(These claims) are based on our redistribution model which looks at how much every family pays in taxes compared to what it gets in government benefits. We look at that for families at every income level. That adds up to a national accounting of how much is paid by each income group in taxes versus how much it gets in spending, and then you look at the overall amount of redistribution. You compare the amount of people that get more back than they pay to the groups of people who pay more than they get. And that difference is the amount of redistribution.”
The report is based on IRS data, Census Bureau data and information taken from the federal budget, Hodge added.