The Wall Street Journal exposes a devious slight of hand by the Obama campaign:

One of Barack Obama’s most potent campaign claims is that he’ll cut taxes for no less than 95% of “working families.” He’s even promising to cut taxes enough that the government’s tax share of GDP will be no more than 18.2% — which is lower than it is today.

…For the Obama Democrats, a tax cut is no longer letting you keep more of what you earn. In their lexicon, a tax cut includes tens of billions of dollars in government handouts that are disguised by the phrase “tax credit.” Mr. Obama is proposing to create or expand no fewer than seven such credits for individuals…

Here’s the political catch. All but the clean car credit would be “refundable,” which is Washington-speak for the fact that you can receive these checks even if you have no income-tax liability. In other words, they are an income transfer — a federal check — from taxpayers to nontaxpayers. Once upon a time we called this “welfare,” or in George McGovern’s 1972 campaign a “Demogrant.” Mr. Obama’s genius is to call it a tax cut.

So the Obama campaign is proposing a new slate of welfare handouts falsely hidden under the guise of tax cuts.   This trick also allows him to discount handouts as a cost of government, giving him misleading figures on the likely burden of government in terms of GDP.

Perhaps even worse, the article notes the affect on marginal tax rates of this scheme:

There’s another catch: Because Mr. Obama’s tax credits are phased out as incomes rise, they impose a huge “marginal” tax rate increase on low-income workers. The marginal tax rate refers to the rate on the next dollar of income earned.

High marginal tax rates provide a disincentive for harder work.  The net affect on the economy is then slower growth and less prosperity for all.  A report from the Fraser institute notes, “High and increasing marginal tax rates reduce economic growth by creating strong disincentives to hard work, savings, investment, and entrepreneurship.”

Already facing a period of economic hardship, thanks in large part to Obama’s Democrat colleagues, his fake tax cuts would do nothing but add fuel to the recessionary fire.