Obama: My Tax Credits are Not ‘Welfare’

By Julia Hoppock

Oct 18, 2008 3:43pm

ABC News’ Sunlen Miller reports: Standing beneath the Gateway Arch in downtown St Louis, Senator Obama responded to claims from the McCain campaign that his tax plan is a "welfare" program because it gives tax credits for people who don’t pay federal income taxes.

"I’m not giving tax cuts to folks who don’t work, I’m giving tax cuts to people who do work. John McCain is so out of touch with the struggles you are facing that he must be the first politician in history to call a tax cut for working people ‘welfare.’"

It is true that the Obama refundable tax credits plan does benefit people who are not paying federal income taxes. But, Obama’s tax credits go to people who pay payroll taxes, even if they are too low-income to pay federal income taxes. The Obama campaign says most working people pay more in payroll taxes than income tax.

"The only ‘welfare’ in this campaign is John McCain’s plan to give another $200 billion in tax cuts to the wealthiest corporations in America – including $4 billion in tax breaks to big oil companies that ran up record profits under George Bush," Obama continued, "That’s who John McCain is fighting for."

While not mentioning the now infamous "Joe the Plumber" by name – Senator Obama told the crowd that his tax plan would give everyday Americans – and plumbers – access to a tax cut.

"It’s time to give a tax cut to the teachers and the janitors who work in our schools; to the cops and firefighters who keep us safe; to the waitresses working double shifts, the nurses in the ER, and yes the plumbers fighting for their American Dream. These workers are the backbone of our country. They’re the ones that Washington has forgotten."

As ABC’s Teddy Davis reported this week, in attacking Obama’s refundable tax credits, the McCain campaign is overlooking that the centerpiece of the McCain health care plan is a refundable tax credit which would provide $2,500 to every American or $5,000 to every American family for health insurance regardless of whether the adults receiving the benefit work.

Drawing a record breaking rally crowd of 100,000 Senator Obama has high hopes of flipping the state of Missouri, where polls currently show him slightly ahead of Sen. McCain.

"I think the winds of change are blowing all across America. They’re blowing here in Missouri, they’re blowing in Michigan, they’re blowing in Illinois, they’re blowing in VA, and they are blowing in Ohio," Obama said listing many red states where his campaign has their eye on to turn blue.

But the Illinois Senator told the crowd not to get too over-confident.

"Democrats have a way of snatching defeat from the jaws of victory," he said remembering his loss in the New Hampshire primary, "This election’s too important to take anything for granted."

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