4 Jan

Middle-class to get taxed more than the rich under new fiscal deal

Hayley Peterson @ The Daily Mail:

Middle-class workers will take a bigger hit to their income proportionately than those earning between $200,000 and $500,000 under the new fiscal cliff deal, according to the nonpartisan Tax Policy Center.

Earners in the latter group will pay an average 1.3 percent more – or an additional $2,711 – in taxes this year, while workers making between $30,000 and $200,000 will see their paychecks shrink by as much as 1.7 percent – or up to $1,784 – the D.C.-based think tank reported.

Overall, nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal.

Nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal
Nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal

‘The economy needs a stimulus, but under the agreement, taxes will go up in 2013 relative to 2012 – not only on high-income households, as widely discussed, but also on every working man and woman in the country, via the end of the payroll tax cut,’ said William G. Gale, co-director of the Tax Policy Center.

‘For most households, the payroll tax takes a far bigger bite than the income tax does, and the payroll tax cut therefore – as [the Congressional Budget Office] and others have shown – was a more effective stimulus than income tax cuts were, because the payroll tax cuts hit lower in the income distribution and hence were more likely to be spent,’ he added.

When the deal was passed by Congress late Tuesday, President Obama said it prevented ‘a middle class take hike that could have sent the economy back into recession’ and have a ‘severe impact’ on American families.

‘Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up,’ he said.

To the contrary, the Tax Policy Center says roughly 70 percent of Americans will see their income taxes rise as a result of the deal. They won’t rise as much as they would have if no deal had been reached and the fiscal cliff was triggered, but they will go up nonetheless.


While the lower brackets will take a bigger hit to their paychecks than those in the $200,000 to $500,000 bucket, their overall federal tax rate will remain smaller

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About Curt

Curt served in the Marine Corps for four years and has been a law enforcement officer in Los Angeles for the last 20 years.

5 Responses to Middle-class to get taxed more than the rich under new fiscal deal

  1. Babydoc says: 1

    This is the intent. “Progressive Income Tax” was devised by Karl Marx for the express purpose of destroying a capitalist economy. Read his own words in his manifesto and in “Das Kapital”.

    The superrich (democrats like Feinstein and Kerry, Soros, et al) already have their wealth and they seek to be the aristocracy in the new leftist totalitarian state. That is why they want to take all our firearms away so that we cannot resist the schemes of the political overlord wannabees. That is why they want to get rid of the Constitution. That is why they have dumbed down the education system and tried to program the youth to make decisions based solely on how they “feel” about something instead of basing decisions on critical data analysis.

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  2. johngalt says: 2

    One can look at it this way, regarding the economy. It takes a certain amount of spending, private, corporate, and government, in order for the economy to be stimulated to grow at specific rates.

    Governmental spending is not likely to drop at all, and in fact, will increase annually based on budgeting techniques, spending initiatives, etc.

    Corporate, or business, spending will go up or down based on consumer activity.

    Private spending will likewise go up or down based on consumer confidence.

    If you remove money, from both private and business entities, by taxation, you remove a certain amount of stimulus to the economy. A person cannot spend what they don’t have(unless they use credit, but that is part of another topic).

    So, by raising taxes on private individuals, and businesses, you remove money that would otherwise be invested, by spending or investment, in the economy.

    And even if that money that is removed by taxation goes to government, it cannot be used for spending in the economy, due to the deficit spending the federal government is currently entrenched in. So, that is less money available to stimulate the economy, meaning less growth in the economy. The pie actually grows less than it needs to in order to make up for the increase in population and those entering the workforce. People, in general, grow poorer.

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  3. Nan G says: 3

    Obama wants to look like Superman or Robin Hood….to the rescue!
    But remember, Obama will target his ”rescue.”
    Only his favorite buddies; the poor, the unionized, the gov’t employee, the green, etc., will be ”rescued.”
    Others, the military, the military contractor, the small businesses, non-unionized workers, etc., will somehow be omitted from this rescue.
    Whether they voted for him or not, the majorities in those groups will find themselves on the outs.

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  4. Greg says: 4

    The payroll tax cut was never intended to be anything other than a temporary measure, to help working families get through the worst of the recession. Do republicans believe that extending it for a longer period would somehow strengthen the programs that the payroll taxes in question fund?

    I’m curious how that argument might fit into their insistence that the programs in question need to be strengthened in order to remain stable in the future.

    ReplyReply
  5. retire05 says: 5

    @Greg:

    It’s not that the payroll taxes went up today, Greggie (they should have never been cut in the first place, but hey, Obama did have to run for office again), its that the stupid people who voted him back into office never had it dawn on him that they were going to see an immediate cut in take home pay just four days after the New Year started.

    Frankly, if I were an employer, I would pull all the voter registration records (public information) of my employees and only those who were registered Republican would ever see a raise.

    ReplyReply

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