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Chained CPI *RAISES TAXES* for the poor to the middle class
Even if Social Security is exempt, it is going to hurt the majority of us.
The Chained CPI would also effectively raise taxes on virtually all working Americans, especially middle and lower income families. By applying it to all government programs, including the annual adjustment in income tax brackets, the Chained CPI would cause those thresholds to rise more slowly than they do now. That would lead to incomes jumping up to higher tax brackets faster, or in other words, income tax increases.
According to Congress’ Joint Committee on Taxation, if individual income taxes were indexed to the Chained CPI starting in January 2013, by 2021, 69 percent of the gains in revenue would come from taxpayers with incomes below $100,000, while those in the highest income brackets would barely be affected. For example, workers with incomes between $10,000 and $20,000 would experience an increased tax burden of 14.5 percent, while those with incomes over $1,000,000 would just see an increase of 0.1 percent. 9 This contradicts the idea that the negative effects from benefit cuts due to a switch to the Chained CPI would be offset by increased revenue from the wealthy.
According to Congress’ Joint Committee on Taxation, if individual income taxes were indexed to the Chained CPI starting in January 2013, by 2021, 69 percent of the gains in revenue would come from taxpayers with incomes below $100,000, while those in the highest income brackets would barely be affected. For example, workers with incomes between $10,000 and $20,000 would experience an increased tax burden of 14.5 percent, while those with incomes over $1,000,000 would just see an increase of 0.1 percent. 9 This contradicts the idea that the negative effects from benefit cuts due to a switch to the Chained CPI would be offset by increased revenue from the wealthy.
The above is an excerpt from a report from the Center For Economic And Policy Research. You can download the report from this page:
http://www.cepr.net/index.php/publications/reports/the-chained-cpi-a-painful-cut-in-social-security-benefits-and-a-stealth-tax-hike
And a link to the press release
http://www.cepr.net/index.php/press-releases/press-releases/chained-cpi-cuts-social-security-benefits-while-raising-taxes-on-the-middle-class
13 replies
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