Bush Tax Cuts "Compromise"©: Individuals earning < $20,000 & families < $40,000 will see an INCREASE

[Amerigo Vespucci]

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.

There's probably a way of looking at this that doesn't make it seem so bad, right?

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

[xchrom]

1. Recommend

[donco6]

2. Rah RAh RAH!

. . . uh, what's my next line?

[dkf]

3. Well it's the best he can get for poor people. Take it or leave it.

"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."

And it benefits people making over $20,000 single/$40,000 couple more than the credit.

[Statistical]

4. The bill should be modified to provide a credit for those people.

Shouldn't be difficult. Technically one has to earn >$6,400 to get full "making work pay credit" ($400) in 2009/2010 so this only affects people making between $6,400 & $20,000.

Also it is the difference of $400 - income * 0.02 so the amount is rather small. The bill should be ammended to provide a credit/offset for those affected. It is a small amount of people and a small amount per person. The total cost has to be a fraction of a billion. Essentially a rounding error in US budget.

Also the list above is missing some groups of persons who benefit:
* anyone making more than $20K annually
* anyone who is unemployed in 2011.
* any family making more than $40K annually.
* anyone who couldn't afford losing $600 per child tax credit.
* anyone who couldn't afford having their margin tax rate jump from 10% to 15%
etc

[BzaDem]

6. The Republicans wouldn't allow it. They specifically do not want to give refundable tax credits to

people who don't pay income taxes. That's why the making work pay credit was swapped for a payroll tax holiday.

[dkf]

11. Expecting people to acknowledge and adapt Republican POVs is heresy for some.

It's our way or the highway. Methinks we will be walking down that road quite a bit.

[jefferson_dem]

8. That sounds most excellent.

If achievable, let's do it!

[Donnachaidh]

10. yeah, and while we're at it -- help the 99ers Obama ignored

Wanna hold your breath on this one until it takes effect? :sarcasm:

[dennis4868]

15. The Huffington Post....

Is not exactly objective these days.... They clearly have an agenda....I don't go to that website anymore.

[Pale Blue Dot]

25. What is your factual objection to what is in the article? nt

[enlightenment]

19. Statistical, not trying to snark, but according to the

US Census Bureau, the number of people earning less than $20,000 in 2007 was more than 39 million - most were women. I doubt that number has gone down much since then.

You say the number is a 'small amount of people' - do you really consider 39 million 'small'?

[Statistical]

23. Ouch. Well a guess I should have said I minority.

I will admit I didn't think it was that large. :(

[BzaDem]

5. If there is no deal, a family of 4 making 40k/year would see a two thousand dollar tax increase.

You should really be comparing "deal" to "no deal," not "deal" to today. Today isn't an option.

[Statistical]

14. Agreed.

No compromise = reset of all tax legislation since Clinton.

no making work pay credit (taxes go up on everyone by $400 per person)
10% bracket goes to 15%
child tax credit drops by $400 per child
25% bracket goes to 28%

A significant tax increase across the board on the poor and middle class. Far more than the difference between 2% and $400.

[jefferson_dem]

7. Would those low income earners be better off if all tax cuts expire, as some are recommending?

If not, then it's time for a reality check.

[Jackpine Radical]

12. Yes, clearly a tax plan that doesn't hurt the poor quite as much

is better than one that hurts them a lot more.

I for one, am cheering Obama's tax deal because he was able to secure such large benefits for the rich while somewhat minimizing the damage done to the bottom end of the wage scale.

[Donnachaidh]

13. Dunno -- let's ask the 99ers Obama ignored

I'll bet THEY have some useful insight. :eyes:

[frylock]

26. are there no workhouses?

:sarcasm:

[ipaint]

9. Pander to the upper classes

fuck the poor.

Same old, same old.

[TreasonousBastard]

16. It would help to read the actual Times blog post, rather than Huffpo's...

hysterical blatherings about it.

http://www.nytimes.com/2010/12/08/us/politics/08impact.html?_r=1

Yes, the better off you are the more you get. Sucks, but what else is new...

Pretty much everyone around the median income and up gets a break-- that's a lot of people. Half the population, in fact. OK, the bottom loses a few bucks, but it's really not that much after all the numbers are in.

Should they lose anything at all? Of course not-- they should get more. But, we're talking united Republicans here and they wanted to screw the lower earners even more.

And, this is assuming the numbers mentioned are accurate and will be, in fact, in the final bill.

[doc03]

17. Retirees are the ones getting screwed over the most, no

COLA, no $400 like last year and larger cuts in the future to pay for this taxpayer giveaway. It is easy to hand out money to people but when will politicians act like adults and quit mortgaging the future generations.

[Statistical]

18. There is no cut in SSA funding. n/t

[doc03]

20. Bullshit the payroll tax is being cut by 2%, where does that

money come from. I suppose you will say the general fund, well there isn't a general fund it comes from borrowed money. They are already wanting to cut SS to reduce the deficit, so you add another $900 billion to the deficit, guess who pays. Statistics can be manipulated to suit whatever axe you want to grind.

[Statistical]

21. Where do you get $900B from? It is $120B.

Republicans will want to cut SS regadless of how it is funded.

$120B from the backs of working class employees -> SSA
vs
$120B from general fund -> SSA

No change in funding
No change in benefits
No change in SS solvency

Only difference is workers get a 2% raise during one of the worst recessions in the history of mankind.

Worrying about deficit spending during a recession is like worrying about how much water costs per gallon while your house burns down.

[doc03]

24. They estimate the total debt from this plan will cost $800-$900

billion. It all comes from the same place borrowed money. Republicans will use that increased deficit to demand even further cuts in SS. Where the hell is the retirees much needed 2% raise in one of the worst recessions in the history of mankind. It is easy position to take when you are when are on the receiving end I guess. No change in funding: there is no fund, there are IOUs. No change in benefits: that's not what the catfood commission says. No change in the SS solvency: the reality the SS is insolvent because there is no money only IOUs. We have IOUs to China and IOUs to SS, who do think will get cut? I wouldn't be one bit surprised if Obama starts bombing Iran tomorrow morning to make the Republicans happy.

[Name removed]

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