When the government gives out money, it is spending. Tax credits are government expenditures run through the tax system; your income collected is then given back to people on their taxes who meet a criteria. Simply having the IRS write the check (instead of a department such as Health and Human Services), allows the government to classify it a cut instead of spending. The “Making Work Pay Credit” cited in Kessler’s piece is a perfect example of what is not a tax cut – this is a government handout. Others include Cash for Clunkers , Energy Credits, and First Time Home Buyer Credits. Instead of doing the honorable thing and using the Treasury to send the money to each eligible taxpayer, the administration instead ran the disbursements through the IRS so they could claim a “tax cut”. This same type of deceit put Enron executives behind bars. Clearly there was nothing resembling a marginal rate tax cut that would be valuable to the economy .