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According to the Huffington Post, because of the structure of the nearly $900 billion Obama-McConnell tax deal, roughly a third of all workers will actually see their taxes increase next year. How anyone can defend this deal as smart politics for Obama is beyond me. From Ryan Grim:
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.
I know most Americans don’t pay attention to the day-to-day political fighting in Washington, but I suspect many voters will have heard that Obama reached a deal with Republicans on a hugely expensive tax cut deal. When roughly a third of voters actually see their taxes go up, even slightly, I imagine they will not be happy with Obama. Once again, Washington will pass a massive piece of legislation, like TARP or health care reform, and they will not see any benefits.
Even if you agree with the general idea behind Obama’s strategy of trading an extension of high-end tax cuts and a reduction in the estate tax for more aid to working people that could stimulate the economy, this execution is horrible.
With the government throwing concerns about the deficit out the window for this deal, there is no reason Obama couldn’t have demanded it be structured to at least prevent taxes from going up on any working class person. After all, that “taxes shouldn’t go up on anyone during a recession” was the principle Republicans claimed to be defending when they held the debate “hostage” for the upper income tax cuts.
52 Comments
Our government is in the hands of idiots and clowns. Fools!
You obviously don’t understand eleventy dimensional chess.
Clearly They are a few moves ahead of me with their greatness.
I have just called my senators, but I really just want to cry.
I can’t imagine anything more likely to get working people in the streets than smaller paychecks in January. Especially after all this sturm-and-drang agony from Obama about how he had to take this deal for the rich in order to ensure that no one’s taxes went up.
When taxes DO go up, will one-third of working Americans wake up?
“It’s the public option all over again” is the most honest prescient statement Obama has ever made.
After all, that “taxes shouldn’t go up on the rich
anyoneduring a recession” was the principle Republicansclaimed to bewere really defending when they held the debate “hostage” for the upper income tax cuts.There we go. What really happened behind closed doors.
A deal like this, where almost nobody has faith that we’ll see the promised benefits, should come with a timeline of economic benchmarks, which, if not met, would automatically trigger a repeal of the plan. I’m sick of one lousy decision after another where we just sit on the sidelines watching some moronic policy play out in slow motion in the exact way those opposing said it would.
Thank you for putting this critical (and hidden)information out there. When those 50 million workers making less than $20,000 actually receive a tax hike, they will be furious with the entire Washington establishment. This time the Dems and Obama will take a hefty share of the anger, thanks to this irresponsible move on their part.
As we were saying here on FDL……
This is a screwjob on the lowest earning workers in this country.
It’s called “intentionally impotent”; in other words, you sent things into motion which will then work as a domino effect and the end result will be disastrous.
Just like the healthcare kabuki dance….smoke & mirrors and dilution (caving) at every step of the process.
No faith/no trust/no credibility left for the deceivers.
Of course, the ability to disown your own tax cuts for the rich (Obama and the Dems) will not be so easily explained or campaigned upon. I feel sorry for the Dems in blue states who will never get out from under this creation of a true caste system.
Obama and the Democrats, sadly, have been pimped and will now own “Obama’s tax cuts for the wealthy”. No getting around that. The minute this deal passes, Bush’s tax cuts for wealthy will be forever put to bed and Obama will now become the rightful owner.
No one has mentioned the countless number of students across the country (of which I am one) who will see large raises in their taxes. As a graduate student, my fellowship is completely taxable, except for FICA taxes. Which means, that in this new tax plan, my taxes go up (without the Making Work Pay credit) but I don’t get the payroll tax reduction. I make $23000/year, which translates to a fair whack of income taxes between IRS, NYS and NYC. Those $400 were important last year and made a big difference.
Any student who is on fellowship, scholarship or work-study doesn’t pay FICA. So, every student see a tax increase. Thanks Democrats!
Just as he now owns this putrid, tanking economy, so he will now own the fact that he increased the budget deficit by $700 million dollars by giving those who need it least (upon which he campaigned forcefully for years) while increasing taxes for those who need it most. This is a very sad week in the history of our country.
6 months ago, I would’ve said yes, they would wake up. I mean getting your paycheck and seeing it smaller WHILE AT THE SAME TIME knowing the wealthiest individual’s checks just got bigger, WHILE at the same time not seeing anything new in the form of real help in this economy, yeah, I would’ve said yes.
I’m just not sure now.
Students and minorities are organizing right now and will no longer be voting Democrat in the future if this passes.
What fun logic.
I guess if the Bush Tax Rates were to revert back to the 2001 levels, we’d have to call it a $4Trillion Obama Tax Increase since that’s how much it would impact the debt. No wonder Obama doen’t want that.
The lowest rates would go from 10% on the first $8,000 of taxible income to 15% on the first $27,000 of taxable income. Many Working Americans Would Still See Taxes Rise.
57% of Americans in the ABC poll opposed the Social Security payroll tax cuts, with all three parties showing low support ranging from 36 to 42 %. That’s right. Democrats, Republicans and Independents, all three had majorities polling against the SS payroll cuts.
http://www.langerresearch.com/uploads/1119a1%20The%20Tax-and-Benefits%20Package.pdf
Our minds have been scrambled with all the chicanery and shenanigans of this congress and administration to the point where people are clueless about what’s really going on.
I do believe they finally “get it” that the rich do not need tax breaks while others are starving, out on the street, and unemployed.
America is finally waking up and I don’t believe will be duped again by this same crowd.
This is their entree into getting the mitts on the social security trust fund. Mark my words. How Democrats can sit back and permit one of the hallmark accomplishments of a Democratic President (Social Security) be tampered with and diminished is an enigma to me. It’s as though they all have a ‘self-destruction’ gene which is firing off as we type….
so who’s whispering in his ear? Maybe no one actually is and it was the plan all the while.
But there would be money for lots of infrastructure projects without diving into debt so much. That would mean a healthier economy where taxes are affordable.
OT. Just read at the NYT that a Federal Judge in Va. has declared the health care bill unconstitutional because of the mandate.
I’d have to guess that screwing the bottom tier is intentional, and is designed to move more of those voters to the right.
“When taxes DO go up, will one-third of working Americans wake up? No.
They’re too busy trying to feed themselves and their families, heat their homes, and keep a roof over their heads, or trying to get medical care. Any spare time will be devoted to watching “Dancing with the Stars.” They will look at their paychecks, sigh and shake their tired heads, and figure they haven’t tried hard enough because that’s what they’ve been told.
What fun logic.
Obviously if tax rates were to continue under the law as signed by George W. Bush that we would blame the increases on Obama. Yep, George W. Bush signed the law that said in 2011 tax rates would raise $4 trillion dollars so obviously those are Obama’s tax increases.
Of course the sad news is that Obama will now own the tax rates, so when they go up after this two years, then you really can call them “Obama’s” $4 trillion tax increase.
Somehow though, I’m doubting they go back up….
Yep.
And correctly, in my view. It’s what I’ve been saying all along.
Peter G. Peterson is one of the architects of this sleight of hand. You are right also that they are not listening to the people, just like they ignored universal support for the public option during the HCR fiasco.
This is no “tax deal!” This is a rip-off of the poor….AGAIN!
They have been stealing from the Social Security Trust Fund for decades. Like everything else, they forget to pay it back!
OT, Fed. judge says Obama’s Health Insurance “Reform” is unconstitutional.
http://www.huffingtonpost.com/
I’ve noticed the rhetoric around this debate has only included the language “middle class” for the last 4-5 days. I couldn’t help thinking to myself “what about the lowers class?”.
Now I know. Apparently the choice of language, in yet another instance, was very calculated.
This makes me glad.
Obama is a trickle downer. He’ll pee on your head and then act surprised at your anger saying it’s the best thing to do in a time of drought.
As far back as the primaries in 08 Obama never mentioned the working class. Everything was about the middle class. Without the working class there is no middle class. In the near future if one has commodities or services to sell to the wealthy one can earn a living. If not, tough shit.
If taxes are going to rise for the bottom third I finally have something I can call my Republican Rep. to bitch about where he might listen.
David Dayen has a fresh cross-post available: Federal Judge Finds Individual Mandate Unconstitutional
This thing’s route through the courts is gonna be like a superball bounced into a rubber room.
Sadly, I found myself doing that very thing this morning in a comment I made. Sometime later, I thought what the hell is wrong with you, old woman?
What about the working poor. Talking points work very well, indeed.
Stuff like this can only make one ask how much is enough. The richest 1% of Americans hold wealth valued at $16.8 trillion. That works out to be $2 trillion more than 90% of us hold. Apparently there is no such thing as enough.
I certainly hope you and the writer Ryan ? are wrong about anyone’s taxes going up, especially those making $20,000 or less who certainlly cannot afford it! Definitely, reverse Robin Hood efect.
Anyway, I have faith in Pres. Obama. No one talks about their state Unemployment checks which come every two weeks but on that off week, the Federal Government dishes out $50.00 to each of the recipients. That has never happened before! Si I have faith that there are good things in the deal for everyday average folks!
This Obama catalyst (tax agreement) has initiated a much needed debate in our country so that the American people can see how a small group of people (the Rich) control this country, do not pay taxes or their fair share due to tax loopholes and tax shelters, leaving the tax burden on the middle class and working poor, and that the GOP talking points that tax cuts create jobs is false, because for the last 10 years that we have had these tax cuts, we have lost jobs.
And the debate also highlights one party, the Republican, refusing to vote on any legislation to help the little people, the people they are supposed to represent — 911 responders, unemployment benefits, etc.,(like spoiled children) until they get their way — tax cuts for the rich! And this ability to not vote on legislation, to hold up the people’s business (or hold them hostage) is this legal? We know it is not fair.
This debate will give the American people a chance to decide if they want to extend the tax cuts to the rich so that their taxes can go down or if they want the tax cuts for the rich to expire knowing that their taxes will go up and they will be paying more come January than they do now. Do they want to make that sacrifice?
Let’s not forget that in order for us to forge new healthy pathways for the country, the dark, the outworn, the negative and false must be exposed.
And by the way, Sen Mary Landrieux you were for the Bush tax cuts and voted for them, before you were against them!
http://patrickhenrypress.info/node/315136
WaPo’s poll showed similar results: strong opposition to draining Social Security of FICA contributions by 57-39, with strongly opposed outvoting strongly support by 39-18 (question 14.c).
But what I found quite stunning was WaPo’s blatant censorship of its poll results: WaPo released the answers to only five of the 36 questions!
This is rather blatant proof that WaPo are propaganda hacks, not journalists. Until WaPo proves otherwise, it seems only reasonable to conclude it suppressed most of its poll results for political effect.
It is just more class warfare.
The article says it is an 8% credit up to $400 ($800 married) – I do not know what they are talking about as the credit is 6.2% and maxed as they correctly reported.
The effect is not just a higher tax for the 20000 and under, it is a gain for the over 75000 crowd as the Making Work Pay credit begins to phase out over that amount.
Obama made a great trade foe the left, didn’t he?
People need to get with the program. Get a poodle haircut, lie on your resume, cheat and backstab at any and every given opportunity, always be on time for happy hour at Balthazar/Gramercy and don’t squabble over money that is little more than the restroom attendants tip.
That’s the world our establishment lives in.
What’s new? The tax burden on the richest 1% of us fell 36% compared to what they would have owed in ’77 while families in the very middle of the income ladder experienced a 7% increase in their tax burden.
When President Reagan announced his tax cuts with great fanfare, I was dismayed to discover that he had actually raised my taxes because I was in a lower bracket.
Obama is simply the most evil president in American history. Considering that he had to jump over Nixon and Bush 43, that’s quite an achievement.
Believe me, I had the same experience. THIS is what too many don’t understand. Even when I showed my super rightwing family my pay stubs, they still insisted on believing the fairy tale that Reagan “cut taxes for everyone.”
Too many drink the Kool Aid, and facts don’t matter.
It certainly seems that way, doesn’t it? I think the *goal* is to have US workers (and the unemployed) so completely downtrodden that we won’t ever complain about anything. The way things are going, that might be what happens… sadly…
Obama works solely & only for the top 3% in this country. Obama completely LIED to get voted into office. Make no mistake, that wasn’t “accidental.” It was very well crafted and planned. Take notes and be aware.
But this tax plan is pure robbery. The language tossed in about helping the economy is just jibberish, designed to make us look the other way while our pockets are being picked.
obama has turned out to be a nightmare, incapable of doing anything well.
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