You'll Never Guess Whose Taxes Are Going To Go Up Because Of The Tax Cut 'Compromise'

[t0dd]

You know, with all the talk about who is mad at President Barack Obama and who stands to win or lose what election over this tax-cut deal, not as much attention has been paid to the practical beneficiaries of the deal. Well, over at The New York Times tonight, David Kocieniewski's got the hard numbers, and finds that the deal is actually a very good one, as long as one or more of the following terms describes you:

--"the highest earners"
--"the wealthiest 1 percent of the population"
--"the wealthiest Americans"
--"hedge fund managers and private equity investors"
--"an individual earning $110,000"
--"4 million taxpayers with income in the mid- to high six figures"
--"Estates over $5 million"

To those of you who fit the descriptions above, congratulations! Really, is anyone not making out like a bandit, with this tax-cut compromise?

In fact, the only groups likely to face a tax increase are those near the bottom of the income scale -- individuals who make less than $20,000 and families with earnings below $40,000.

...

Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit.

"It will come to a few dollars a week," said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, "but it is an increase."

http://www.huffingtonpost.com/2010/12/07/tax-cut-compromise-whose-taxes-rise_n_793572.html

[FrenchieCat]

1. How?

Please explain.

[Luciferous]

4. Read the article at the link

It's not much of an increase (400-800) but it's still an increase.

[tridim]

6. Faux, I mean Huffpo is lying again.

So much potential, wasted.

[Statistical]

11. Not lying. In 2010 everyone* got $400 credit in 2011 it will be 2% of gross pay.

Someone making $20K per year that is exactly even. (.02 * $20K = $400. $400 = $400)
Someone making >$20K comes out ahead ( .02 * $100K = $2000. $2000 > $400)
Someone making <$20K falls behind. ( .02 * $15K = $300. $300 < $400)


* to get full $400 in 2010 one had to have $6,400 in earned income. Less and you got a prorated credit.

[FrenchieCat]

2. How?

Please explain.

[Luciferous]

3. K&R

[Statistical]

5. To those asking how... here is how.

Currently there is the making work pay credit (passed in 2009, extended for 2010). It works out to $400 per person, $800 per family.

This is replaced by 2% tax holiday.

So someone making less than $20K will get less than $400 and family making less than $40K will get less than $800.*

Technically it is more complicated than that because the MWP credit is prorated for those earning less than $6,400. So technically the "losers" are those making more than $6,400 and less than $20K (double for family with 2 workers).

For more people it is a small increase but still an increase.

Take someone making say $16,500. In 2010 they got the MWP credit = $400 reduction in taxes. In 2011 they lose that -$400 but gain 2% payroll tax reduction. 2% of $16,500 is $330. Their taxes will increase by $70 compared in 2010 (lose $400 credit, gain $330 tax holiday).

[Nite Owl]

7. K&R

[BzaDem]

8. If the deal weren't passed, their taxes for families of 4 would go up by thousands.

The difference between the making work pay tax credit (800) and the payroll tax holiday (2%) does not even come close to how much they would lose if there weren't a deal.

[Starry Messenger]

9. k&r

[DearAbby]

10. Reverse Robinhood....

Taking money from the poor to pay the wealthy
Robbing Peter to pay Paul
Being Phucked without a kiss....

shall I go on?

[leftstreet]

12. K&R

[laughingliberal]

13. K & R nt

[ruggerson]

14. Even symbolically, that's just plain stupid politics

n/t

[Rex]

15. I can't believe we are talking about hundreds of dollars for the working

poor and MILLIONS of dollars for the uber wealthy! This country is fucked from the top down.

[Catherina]

16. A few dollars a week here, a few there from your poorer families

pretty soon it all adds up.

We need some trustworthy economists, not spinmeisters, to review this travesty before they vote on it.

[glitch]

17. Robert Reich calling it an abomination.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x9720327

[intheflow]

22. I know.

To people making $50k+, it's just a cuppa coffee at Starbucks, fer crissakes, what's the big fucking deal? :eyes:

For a poor family, it could mean dinner or gas to get to work.

[amborin]

18. k&r

[frylock]

19. that is so awesome!!

jfc it just keeps getting better.

[alfredo]

20. By the time congress gets done with it, you won't recognize it.

It's going to be one hell of a fight.

[intheflow]

21. .

:grr: :grr: :mad: :grr: :grr: :mad: :grr: :grr: :banghead: :grr: :grr: :mad: :grr: :grr: :mad: :grr: :grr: