Daniel Tencer – Obama-GOP deal raises taxes on poorest earners
From The Raw Story:
Wednesday, December 8th, 2010 — 5:50 pm
Quarter of tax savings will go to richest one percent
The plan to extend Bush-era tax cuts that President Barack Obama struck with the Senate Republican leadership will result in lower taxes for wealthy and middle-class Americans but will mean a tax hike for the very poorest earners.
According to an analysis in the New York Times, the Obama-GOP deal will mean that individuals earning less than $20,000 and families earning less than $40,000 will see a small tax hike.
“It will come to a few dollars a week,” Roberton Williams, an analyst at the Tax Policy Center told the Times. “But it is an increase.”
As part of the deal, Obama agreed to drop the Making Work Pay credit that was created as part of the stimulus package, and replace it with a lower payroll tax. That lost credit — of $400 or $800 — is greater than the amount low-income earners will save from the lower payroll tax, meaning, in total, they will pay more.
Of the estimated $900 billion in new and continued tax breaks in the deal, about one-quarter — $225 billion — is expected to go to the top one percent of earners.