by Linda Beale
David Cay Johnston on Stiffing the Working Poor
crossposted with Ataxingmatter
David Cay Johnston, former New York Times tax reporter and now a columnist at Tax Analyst’s Tax Notes, writes this week about the way both the Obama White House and the Republican party conspire to provide every-increasing benefits through the tax system to some while stiffing the working poor. Download David Cay Johnston. Obama and the GOP United Against the Working Poor. TN 14Feb11.
The beginning paragraphs make the critical points.
The tax compromise passed in December has been hailed everywhere as a payroll tax cut combined with an extension of the Bush tax cuts, despite the fact that it raised taxes on a third of Americans. The killing of Obama’s Making Work Pay tax credit, which the White House called the biggest middle-income tax cut ever, and the replacement of it with the Republicans’ payroll tax cut raised taxes on single workers whose wages come to $20,000 or less and married couples with less than $40,000 in wages. That’s 51 million taxpayers, the Tax Policy Center estimated.
[Two-thirds of the poorest quintile had a tax increase of $134 (about 1.3% of total cash income), whereas] at the top, just 1.8 percent of the top 1 percent ([those with] more than $564,600) were hit with a tax inrease. Just 1.3 percent among the top tenth of 1 percent ([those with] more than $2 million) got a tax hike. These best-off one in 1,000 Americans got a tax cut worth on average $45,000 each, all financed with borrowed money.