Can you explain the difference between capital and revenue items of expenditure and income?

A tax break from Obama...but how will it work?

• We already know Obama wants the current tax breaks under the Bush administration to expire in 2010. By default, your taxes will go up. My question is, Obama says he'll give tax breaks to corporations who keep their business in the US. He also claims no taxes or tax breaks to people who make less than $250,000 (or less than $200,000...or less than $150,000 according to Biden...depending on the day it is). Here is how I see this issue. Let's pretend I'm the government in my family...I'm Obama. I am married and let's say I have 5 kids. Let's now worry about where my kids and my wife get their money. Let's say I need $44 per week to make our family run. This will go toward cable tv, movies, vacation, etc. Whatever you want. To get this, I'm going to tax my family of their income that they've earned. Let's say my 3 youngest represent the lower class. They make $10, $15, and $15. They work for mom, who will represent the upper class making $50 per week. Lets say my second oldest child represents the middle class, cruising along at $20 per week. Now, my oldest child has been very successful and represents large corporations making $60 per week. So we have, from youngest to oldest, $10, $15, $15, $20, $60, $50 per week. Respectively, I'm going to tax them $2, $4, $4, $6, $20, and $8 per week for my $44 per week. Under Obama's tax plan, anyone making less than $22 per week (in my little made up scenerio) won't see any taxes, and the large corporations that keep their business in the US will recieve a credit. So now, my four youngest aren't taxed anymore. I'm going to give my oldest son a credit and only tax him $17 (down from $20.) I still need $44 per week for me to "run my family". So, now I'm going to tax mom a whopping $27...up from her previous $8. She's left with $23 per week for herself...but earns $50! She likes to shop. So now to make up the difference in her revenue...she's going to fire the 3 youngest because she can't afford to pay them AND the increase in taxes. So, even though my 3 youngest have no taxes, they also have no job. You CANNOT lower taxes for the lower class without raising the astronomically raising the taxes for another class. How does Obama think this will work? Someone please explain!

• Answer:

  A few paragraph breaks in your example would help a lot. Although I think it would still be confusing and badly worded. It doesn't seem like it actually has much to do with the real tax cuts proposed by the Obama camp.