Really Really Targeted Tax Cuts

Obama made news today because he proposed tax cuts, at first I was surprised and thought maybe he learned his lesson and was trying to move to the center. Nope, his "tax cuts" are a complete joke. The amount of help they give is really really minimal. He expands the child care tax credit so that if you have two kids, you get to keep $900 more of your money, and $450 if you have only 1 kid in dependent care. Put it another way, you save $75 per month if you have two kids and $37.50 if you have 1. Talk about a drop in the bucket. I'm paying more than $1,500 a month for child care for two kids and that is after haggling over the price! Another issue is that the IRS will only let you take this child care credit if both parents have earned income during the year. So if you are one of the long term unemployed who needs to put their kids in daycare in order to find a job, or you are in a commission based business and haven't been able to make a sale, you are out of luck. He also wants to put a limit on student loans and expand elderly dependent care aid. More yawners.

I've always thought there were two points of tax cuts. First, letting people keep more of the money that is rightfully theirs. Second, spurring economic growth. On the second issue, tax cuts really need to reach a certain threshold to actually change people's actions and get them to spend more. $37.50 or $75 per month is definitely not at that threshold and would probably just incrementally reduce expenses for the family and not lead them to do anything different. These tax cut proposals are so lame it's like Obama wants to appear like he is cutting taxes for the middle class, without actually cutting taxes all that much.