Congressional Democrats side-step the most odious consequence of the Obama/McConnell tax “cut” plan, allowing statements like this one to go unchallenged:
Senate Minority Leader Mitch McConnell (R-Ky.) added that the vote “represents a clear shift in the debate over America’s path to economic recovery,” as “Democrats joined our effort to ensure taxes aren’t going up on anyone and that Americans are keeping their money so they, not the government are more equipped to help bring our economy back.”
Sure, there’s lots wrong with the deal, on the estate tax and the broken promise to end the wealthiest Americans’ socially useless Bush tax cut, but no one talks about the worst part of it: taxes will go up for about a third of American workers.
The lowest-paid third.
The tax deal reached between President Obama and congressional Republicans could mean a higher tax bill for roughly one in three workers as a result of the Social Security tax cut Republicans pushed as a replacement for the current Making Work Pay tax credit.
The Making Work Pay credit gives workers up to $400, paid out at 8 percent of income, meaning that anybody making at least $5,000 gets the full amount — and gets as much as anybody else. Its replacement knocks two percentage points off the payroll tax cut, meaning a worker would need to make $20,000 to get a $400 break. Of the nation’s roughly 150 million workers, around 50 million make less than $20,000 and will see at least some increase as a result.
Of course, those aren’t the only taxpayers being lied to about their magically unharmed paychecks come January First:
Additionally, roughly a quarter of 20 million state and local workers pay no payroll tax, because they have a separate pension system. Some of those workers with children will benefit from the extension of other tax credits, but overall will have less money in their pocket.
It’s baffling to me: these two natural constituencies of the Democratic Party — especially the working poor, but also state and local employees — will see higher taxes two weeks from now.
But no one’s talking about that. Everyone allows Barack Obama, and now Mitch McConnell, to talk about this marvelous deal as if it’s true that no one’s taxes will go up, when that simply is not true. Most wage-earners hang on to our last pay stub of the year, for taxpaying purposes and to be sure oour W-2 is done correctly.
People are going to be able to compare our last 2010 pay stub with our first 2011 paycheck.
And one-third of American workers (the lowest-paid third, but still!) will see right away that President Obama lied to us. So did the GOPs with whom he made this deal.
Why aren’t Democratic Congresspersons making a bigger deal about this? Why aren’t Democrats fixing this part of the deal to make what President Obama says is true?