Larry Summers: The GOP wanted to replace Make Work Pay tax credit with payroll holiday

[Hello_Kitty]

Senior White House adviser Larry Summers told reporters on Wednesday that the GOP wanted to replace Making Work Pay with the payroll cut. "It came out of the process of compromise with the Republicans who were more attracted to the payroll tax holiday concept, and that was a proposal that, as had been coming out of here, we had been giving considerable thought to in the context of the President's budget," he said.

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


I keep being told that Making Work Pay expiring and the implementation of the payroll holiday are unrelated things, therefore this isn't really a tax increase on the poorest workers. But here Summers is saying that MWP was directly traded for the SS tax cuts. So this is an increase on the lowest wage workers (who got more from MWP than the payroll holiday), done deliberately so, to the benefit of the highest paid workers.

Make $10K you lose your MWP in exchange for the 2% reduction in SS payroll tax. You lose about $200 in the deal. Make $106K or more you gain around $1600 (difference between MWP and SS tax cut at that level). That's some regressive-ass bullshit, I don't care how you defend it.

[Hello_Kitty]

1. Kick, motherfuckers. eom

[ProSense]

2. It's no

secret that the Republicans hated the Making Work Pay credit. They wanted all the stimulus provisions to expire.

<...>

Senior White House adviser Larry Summers told reporters on Wednesday that the GOP wanted to replace Making Work Pay with the payroll cut. "It came out of the process of compromise with the Republicans who were more attracted to the payroll tax holiday concept, and that was a proposal that, as had been coming out of here, we had been giving considerable thought to in the context of the President's budget," he said.

White House officials have said that the situation must be viewed in the context of the entire package and that Republicans strongly resisted extending the refundable tax credits, such as the child tax credit or earned income tax credit, that will more than offset the loss of MWP for many workers. Had those credits expired, lower income workers would have been worse off.

House Democrats, in their package, did not extend MWP, so, in that sense, the White House proposal is more generous. Making Work Pay is a more effective stimulus, economist Dean Baker said, because a higher proportion goes to the poorest workers, who are most likely to spend it immediately. "Dollar for dollar, undoubtedly, Making Work Pay is going to be more stimulative. The higher-end people will get five times as much than someone earning $20,000," said Baker, of the liberal-leaning Center for Economic Policy and Research.

<...>

The MWP credit was a really good benefit and it should have gotten more attention.

[Hello_Kitty]

5. You added the WH spin job

White House officials have said that the situation must be viewed in the context of the entire package and that Republicans strongly resisted extending the refundable tax credits, such as the child tax credit or earned income tax credit, that will more than offset the loss of MWP for many workers. Had those credits expired, lower income workers would have been worse off.

Look! Over there at those tax credits! It could have been worse, paupers!

They joined with the GOP to replace MWP with the payroll tax cut, and then attempt to distract with continued tax credits (that mostly go to people with minor children and for most of them are merely an extension of the status quo they've had for the past couple years).

You're absolutely right about Making Work Pay being a good thing. And since clearly the WH didn't fight to keep it in the compromise this SS tax cut should really be understood as a cave-in to them and not a victory for Democrats.

[ProSense]

6. WH spin? I did no such thing.

The Making Work Pay credit was not in the House package that passed. The point was made by Grim, not the WH. Is he using WH talking points too?

Instead of trying to turn everything into a conspiracy, address the point.

[Hello_Kitty]

8. Yes, and we know why it isn't

Because the WH traded it for this regressive payroll tax cut.

[whosinpower]

3. So....again....

I ask - why has that been sold as a democratic goal - the payroll tax holiday? Aggresively I might add. It was a GOP idea all along.

[Name removed]

4. Deleted message

Message removed by moderator. Click here to review the message board rules.

[pa28]

7. Republicans have already admitted the expiration will be treated as a tax increase.

They'll pretend to be shocked and outraged as they roll out a privatization scheme designed to strip away the accrued value of SS.

[applegrove]

9. Oh they are sick puppies those assholes. They think with their money that they will take

over the markets of the world. But they won't. They'll just turn America into a place where even they don't want to live (in a gated community). And then they'll take all their wealth and move.

[whosinpower]

10. Kick for truthiness nt