Obama-Republican Deal Could Mean Tax Hike For One In Three Workers

[laughingliberal]

WASHINGTON - 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.

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.

Rep. Raul Grijalva (D-Ariz.), co-chair of the Congressional Progressive Caucus, said many House liberals were opposed to the payroll tax cut because of its effect on the poorest workers. Progressives are also concerned that the tax cut will become permanent and undermine Social Security's funding stream and political support over

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

[Curmudgeoness]

1. I have a sinking feeling that the Social Security tax cut is another nail

in the coffin for the future of Social Security. Mark my words, one day in the future, this will be used as a reason why Social Security is unsustainable, is failing, will not be there, etc. What are they thinking? One day they tell us that SS is in trouble, the next day they want to cut its funding. I don't get it.

[laughingliberal]

2. That's one of Sanders' big objections to this 'deal.' nt