Dec 13, 2010
The headlines say that the recent tax deal between Obama and the Republicans will cut taxes for everyone. This is a lie.
Families with incomes less than $40,000 per year – that’s most of the working class – will pay more.
That’s because the deal eliminates the “Making Work Pay” tax credit of $400 for individuals and $800 for families that was introduced in 2009, and the two% reduction in the Social Security payroll tax does not make up for this.
And for six million federal, state, and local government workers, it’s worse. They do not pay Social Security taxes because they pay into other pension systems, so they will lose the $800 tax credit, but receive no cut in their payroll deductions.
No matter how the politicians try to dress it up, this deal stinks to high heaven.