Obama-Republican Deal Could Mean Tax Hike For One In Three Workers

[Donnachaidh]

http://www.huffingtonpost.com/2010/12/10/obamarepublican-deal-coul_n_795187.html

WASHINGTON - The tax deal reached between President Obama and congressional Republicans could mean a higher tax bill for roughly one in three workers as a result of the Social Security tax cut Republicans pushed as a replacement for the current Making Work Pay tax credit.

The Making Work Pay credit gives workers up to $400, paid out at 8 percent of income, meaning that anybody making at least $5,000 gets the full amount -- and gets as much as anybody else. Its replacement knocks two percentage points off the payroll tax cut, meaning a worker would need to make $20,000 to get a $400 break. Of the nation's roughly 150 million workers, around 50 million make less than $20,000 and will see at least some increase as a result.

Additionally, roughly a quarter of 20 million state and local workers pay no payroll tax, because they have a separate pension system. Some of those workers with children will benefit from the extension of other tax credits, but overall will have less money in their pocket.

Rep. Raul Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, said many House liberals were opposed to the payroll tax cut because of its effect on the poorest workers. Progressives are also concerned that the tax cut will become permanent and undermine Social Security's funding stream and political support over time.

MORE at the link ---

[BrklynLiberal]

1. Guess they were hoping that the truth would not surface so quickly...

[somone]

2. That headline should be in the news

[upi402]

3. I am disenfranchised

It looks to be official.

[Hello_Kitty]

4. "But it will be worse if we let them all expire so move along nothing to see here."

Just thought I get that in.

[BzaDem]

7. You say that as if it's not true.

In your quest to block the bill, the family who would lose 100/year under the bill would lose two thousand dollars with the bill.

It's pretty sad when you write a sentence intending sarcasm but in reality your sentence is correct without the sarcasm.

[Hello_Kitty]

9. Have you called your members of Congress to ask them to address this problem yet?

It's pretty sad when people who stand to keep their tax cuts are so accepting of the poorest workers among us having theirs raised. Since this deal, or something close to it, is what we're going to get why don't you be part of the solution to get this problem fixed?

[Nite Owl]

10. We're incurring almost a trillion

dollars of debt so who do you think will ultimately pay for this bill? It won't be the rich it will be the poorest and the middle class, they will pay higher taxes and/or lost important benefits. It's like handing out bags of candy and then putting someone on a strict diet.

[Hello_Kitty]

11. They're just giving the poor a little early head start to help pay for it.

[sasha031]

5. K&R

:kick:

[BzaDem]

6. Bill passes? 100 dollar/year tax increase on family of 4 at poverty. Bill fails? 2 THOUSAND increase

for same family of 4 at poverty line.

[Hello_Kitty]

12. BTW, it's $200 a year on a person making $10K.

And please don't remind me how much worse it will be if all the tax cuts expire. Whatever happens the tax cuts are not expiring. It's a strawman.

[Hello_Kitty]

8. Fuck you Larry Summers!

Summers, asked by reporters about the effect on poorer workers, conceded that they would suffer slightly under the payroll tax cut as compared to Making Work Pay, but said the other tax credit extensions would balance it out or make the family better off. And if GDP goes up by one percent, he said, "that's $2,000 for the average family." Of course, wealth is not distributed to each family equally in the United States, so the poorest are very unlikely to see as much of a benefit from economic growth as the wealthiest.

That's bullshit since all the other extensions are what they're currently getting but even if it were true, what about the single people or couples with no minor children?