Toxic Tax Cuts

"The Worse Off You Are, Your Taxes Increase": Journalist David Cay Johnston Slams Obama-GOP Tax Deal: "DAVID CAY JOHNSTON: Well, you certainly cannot accuse the Republicans of leaving any money on the table. They got an extraordinarily good deal, that raises, I think, basic questions about the negotiating skills of the President. The bottom roughly 45 million families in America or households in America—and there are a little over 100 million households—they’re going to actually see their taxes go up. And that’s because President Obama’s Making Work Pay credit—$400 per person, $200 for a couple, and you got it even if you were retired or disabled—is going to go away. And it’s going to be replaced by this temporary two percent reduction in the payroll tax, the Social Security tax. Well, for about 45 million households who make less than $20,000 a year, this is a tax increase of $150 to $200 each. So, it certainly seems to me it’s reasonable going forward, given how the Republicans have emphasized they will never raise taxes on anyone and they are the party of tax cuts, that the Republicans have now become the party of tax increases on the poor.

At the top end, if you’re a two-income couple and you make a little over $100,000 each, so you pay the most Social Security tax, you didn’t get Obama’s Making Work Pay credit. You were regarded as too well off. But that Social Security payroll tax decrease is going to mean about a $4,200 tax cut for you. So, clearly, we could see the scheme of this is: the better off you are, the more help you get from the government; the worse off you are, your taxes go up."