David Cay Johnston on Stiffing the Working Poor
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.
In Russia since January Unified Social Tax increased from 26 до 34%.
Its impossible for most of small and middle business. A lot of companies decided to close, other – pay salary in “black way”.
I have gotten myself banned at one of the liberal cites for pointing out repeatedly what a terrible bill of goods the President agreed to with Mitch McConnell in December. The other shoe is about to drop with Ryan, Cantor and Sessions getting ready to push a plan to end social security as we know it, presumably as a condition to avoiding default in March. I have no confidence in either the President or the Democrats in general to push back.
welcome. I also have been banned by “liberals.” apparently for advocating raising the payroll tax one half of one tenth of one percent per year…. as CBO descrives in option 3 for “fixing” social security.
apparently the “liberals” will not be happy unless they can fix social security…which aint broke… by taxing the rich.
YOu see, “liberals” aren’t any smarter than conservatives. They swallow the Peterson line that SS needs to be destroyed because it is going to require huge tax increases in the future, and they say, hey, we got an idea, lets save social security by making huge tax increases on the rich.
If I were the President, I’d go on prime time and call these guys out. Show ’em the pen I’ll veto any idiocy with. But, I am noted for my lack of diplomacy in many things relating to the federal govt. and SS/SSA in particular. And, I am not inclined to say yes for the sake of just being agreeable. As you may have noticed! NancyO
did i say that social security can be “saved” by either doing nothing at all, or by making tiny tax increases (think forty cents per week each year) on the people who will get the benefits?
you see, the Petersons lie and talk as if SS was a welfare program. the “liberals” think SS ought to be a welfare program.
somehow the idea of workers paying for their own retirement/insurance in a program that protects their savings from inflation and market losses does not appeal to either side.
FDR would be sick at them. Of course he’d expect it from the Republicans, but that liberals would turn out to be so stupid would, i think, disappoint him.
Terry car to show us a link specifically defining this: “The other shoe is about to drop with Ryan, Cantor and Sessions getting ready to push a plan to end social security as we know it,…”
Are you talking about major or minor, immediate or long term changes?
can’t see that Russian problems relate to ours in any way that sheds light.
Terry care to show us a link specifically defining this: “The other shoe is about to drop with Ryan, Cantor and Sessions getting ready to push a plan to end social security as we know it,…”
Are you talking about major or minor, immediate impact or long term impact changes?
but i can see that some “conservatives” will start rolling on the floor in agony, crying out that if we don’t cut Social Security NOW, we’ll end up just like the Russians.
They get funny that way.
Agreed. As I tell my more conservative friends “I am a liberal, but I am not an idiot”
There was an article on Talking Points Memo yesterday with Cantor stating that major changes to social security had to be part of any serious deficit reduction with Ryan being less unequivocal, but we had his “roadmap” over a year ago. Sessions was asked about it and said Ryan’s “roadmap” was a huge improvement over the current law.
I wish that I could believe that the President, the man who billed himself as a true progressive, a man of the common folk, could be relied upon to take that tough stand that you imagine. It is not a matter of diplomacy. It is only a matter of socio-political ideology and adherence to one’s expressed beliefs. The question in my mind is whether Obama believes in governing for the good of all the people or politicking for his own good. From the NY Times this evening comes a depressing look at yet another preamble to selling out in the name of conciliation. Here is a brief, but significant, part of Obama’s message regarding the budget deficit controversy and negotiations.
“The White House has already opened back-channel conversations to test Republicans’ willingness to negotiate about the soaring costs of Medicare and Medicaid, Social Security’s long-range solvency and an income-tax code riddled with more than $1 trillion a year worth of loopholes and tax breaks.”
Is he last phrase in that statement a secret code? We can only hope.
We gotta just eliminate all tax breaks. Just have a striaght progressive income tax, and a straight progressive capital gains tax. No more breaks for everyone, rich, midde, poor. Everyone pays… No more special interests…
Democrates and Republicans both will have to start prioritizing what’s important for the country instead of fighting about their own special interest needs. How hard is it to wean off that credit card? That credit card bill is coming due soon!
I am beginning to get really tired being lectured by “other” countries whom buy our debt to shape up our own finances…
I agree about the “straight progressive income tax” with no tax breaks. The economy will sort itself out around that. And so will the people.
If it turns out that some businesses, or some people, need a boost from the government, that can come from some straightforward business loan program, or even welfare. It is just invitation to insanity to do it wiht the tax code.
oh yes, also a straight progressive capital gains tax… it’s income.
the difference is that capital gains are sometimes a lot less than they appear after inflation is considered. i am open to honest argument on the subject, but my guess is that if people know that they are going to have to pay the tax on the whole gain, the “gains” will take care of themselves.
meaning, among other things, that i won’t buy a 3% bond in a 3% inflation environment without knowing, at least, that i am going to end up with less than i started with ‘after taxes.’