You'll Never Guess Whose Taxes Are Going To Go Up Because Of The Tax Cut 'Compromise'

You know, with all the talk about who is mad at President Barack Obama and who stands to win or lose what election over this tax-cut deal, not as much attention has been paid to the practical beneficiaries of the deal. Well, over at The New York Times tonight, David Kocieniewski's got the hard numbers, and finds that the deal is actually a very good one, as long as one or more of the following terms describes you:

--"the highest earners"
--"the wealthiest 1 percent of the population"
--"the wealthiest Americans"
--"hedge fund managers and private equity investors"
--"an individual earning $110,000"
--"4 million taxpayers with income in the mid- to high six figures"
--"Estates over $5 million"

To those of you who fit the descriptions above, congratulations! Really, is anyone not making out like a bandit, with this tax-cut compromise?

In fact, the only groups likely to face a tax increase are those near the bottom of the income scale -- individuals who make less than $20,000 and families with earnings below $40,000.

There's probably a way of looking at this that doesn't make it seem so bad, right?

Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit.

"It will come to a few dollars a week," said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, "but it is an increase."

No worries! Poor people don't create jobs, anyway, I hear.

[h/t: Jake Tapper]

RELATED:
Tax Package Will Aid Nearly All, With the Highest Earners Benefiting Most [New York Times]

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Comments

[MrUniteUs]

05:10 PM on 12/13/2010

If just half the people that read this article contacted the media
and their elected officials. It could make a difference.

[ChasG]

01:57 AM on 12/14/2010

No, the article is wrong.  Here's proof. 
 
 For anyone who wants to know what their taxes would be next year, both with and without the Obama compromise, here's an easy calculator provided for free by the Tax Foundation­­­­, a nonpartisa­­­­n tax research group in Washington­­­­, DC.  Try it out on yourself and then tell me you prefer paying higher taxes right now. 
  
http://www­­­­.mytaxb­u­r­d­en.o­rg­/
 
Test it first.  Type $20,000 into the box next to wages, make no other changes or entries (it's pre-set for filing status single).  Next scroll to the bottom and click [Calculate My Tax Bill for 2011].  The following results should appear, showing $825 annual tax savings from the compromise over defeat of the compromise.  If wages go to $40,000, the annual tax savings increases to just over $1,200.
 
Play with it.  Run your own numbers and see for yourself. 

[OldFatGuy]

04:14 PM on 12/14/2010

That calculator is a straw man as it relates to this article though. The article is saying those low income folks will get a tax hike compared to CURRENT, 2010, tax law.

That calculator, unless I missed something, only compares the compromises to the 2011 law if nothing changed.

The article points out that compared to NOW, low income earners will get a tax hike. I believe that's accurate unless I see some other evidence. This calculator is not that evidence.

[MrUniteUs]

03:28 PM on 12/11/2010

This is so wrong.

[jabailo]

02:57 PM on 12/11/2010

Democrats and the Congress are always welcome to add more tax cuts for the poor, the middle class ... and anyone else.

Nothing is stopping them from making cuts on top of extending the Bush tax cuts.

[smellyecoli2]

02:46 PM on 12/11/2010

So what's new?? The little hard working tax payers always get shafted!! Big fat slop hog Washington elected and appointed politicians will never vote away their big juicy tax breaks !! Support the USA government(democrats,republicans,independents,tea party,etc) of today?? One big HELL NO !!!! I am more afraid of these power hungry fools in Washington than any so called terrorists !!!WW II Pacific combat vet.

[DarrelC]

02:45 PM on 12/11/2010

The weathiest Americans already pay Federal income tax of 35% on their income above $373,650. They also pay state income tax up to 11% of their income, depending on the state. So taking 46% of their income above $373,650 is not enough? The tax bill before Congress keeps these current rates. Taxes go up without this bill.

[Saje3d]

03:55 PM on 12/17/2010

That's only if you don't include shelters and other legal and quasi-legal tax dodges... you know, the ones they have the money to pay people to arrange? Pardon me if I don't cry for the poor abused little rich folk.

[Alaryic]

02:13 AM on 12/18/2010

If I made anywhere near to $200,000 a year after taxes I could live so fat and large... I'd give up 60% of my pay if I could still earn even $120,000 a year. That includes sending my boyfriend to college and paying for our housing, and keeping up with four animals. In fact, I could actually afford to take them to the vet once a year, maybe we could *gasp!* think about starting a family or buying land for ourselves *double gasp*. So my taxes are going to go up this year because I make ohh, about $15,000? Yeah, that's fair. Not. The broke are the ones who should be outraged and complaining. The rich just got richer from this bill, and the poor got poorer, nothing changes, it just gets worse.

[Alaryic]

02:37 AM on 12/18/2010

Which I guess, IS change, but not the kind 99% of us want to see...

[on a pale horse]

08:06 AM on 12/11/2010

Coming soon to a government near you:

Existence tax: you didn't have a say in whether you should exist, or not--but we've gotta tax you for it, which leads us to our next tax:

Air tax: There's only so much good air, and you're breathing it--so pay up.

[ChasG]

10:54 PM on 12/10/2010

Don't be fooled by the mis-information in this article, which is designed to make you angry about a non-existent problem" with the Obama compromise.  There is objective non-partisan fact to confirm this blog is entirely misleading. (see link below)
 
Without Obama’s tax cut, the increase in taxes for the middle class alone would be $300 billion a year, virtually nullifying the stimulus package that created over a million new jobs this year.  That means no compromise and we risk more unemployment and recession.
 
Without Obama’s compromise­­­­, a single person making $20,000 in wages will pay almost $100 a month more income and payroll taxes than he/she would with the compromise (including the payroll tax credit).
 
Here's an easy calculator provided by the Tax Foundation­­­­, a nonpartisa­­­­n tax research group in Washington­­­­, DC.  Try it out on yourself and then tell me you prefer paying higher taxes right now. 
 
http://www­­­­.mytaxb­u­r­d­en.o­rg­/
  
I am happy that the extension did not give GOP what they really want-- PERMANENT tax cuts.  That's a GOP concession that may come back to haunt them (if progressive and center-left Dems can rediscover common ground).  The extended tax cuts expire in two years, immediatel­­y following the 2012 elections, unless congress and the president all agree on something different.  This was brilliant politics by Obama, because the two-year expiration of tax cuts under this compromise guarantees that tax cuts for the wealthy will be a hot-button campaign issue in 2012.

[Sarad]

06:17 AM on 12/11/2010

And who will believe anything Obama says in 2012?

[StopDebtCalls]

02:30 PM on 12/11/2010

I do not believe what he says or what he stands for I feel USA needs to get our of The UN if not we are all in deep deep trouble our " FREEDOM" ....... watch Endgame you tube NWO ............ please watch ......................

[voyou]

05:51 PM on 12/11/2010

So, with a majority in both houses of Congress, and with no immediate electoral pressure on him, Obama couldn't get rid of the Bush tax cuts for the wealthiest. Yet, in 2012, with a Republican majority in the House and more Republicans in the Senate, and in an election year when he's acutely vulnerable to Republican attacks, you expect him to somehow be able to get rid of the Bush tax cuts? Don't be ridiculous. Obama's capitulation now means that the Bush tax cuts are effectively permanent.

[Truth In Voting]

07:17 PM on 12/10/2010

I wonder which states have populations that fall under a $40,000/year median, who are getting a tax INCREASE?

http://www.census.gov/hhes/www/income/data/incpovhlth/2009/stateonline_09.xls
Factoring margin of error, those states are:
$36,650 Mississippi ±$721
$39,392 Arkansas ±824
$40,627 West Virginia ±798
$40,895 Tennessee ±787
$41,489 Kentucky ±775

Kentucky, congratulations on voting against yourself, you deserve Rand Paul.

Mississippi, it's not too late to declare yourself still seceded from the Union, but not due to your median income, due to the fact that Republicans work against you, yet you still gave us Haley Barbour.

Tennessee, you can join Mississippi because you voted in tax-cutting blowhard Lamar Alexander to the Senate.

I can't decide what to do with you, Arkansas, you threw out Blanche Lincoln, who worked in your economic interest, for John Boozman. But I don't think the Clintons would let us revoke your statehood without a fight.

West Virginia, you are redeemed by the late Senator Byrd, who, bless his soul, was able to see his cherished goal of more healthcare equality before he passed away, unlike his dear friend Senator Kennedy. Although his health was rapidly failing, he was a devoted proponent of universal healthcare and was present for every critical vote during the December 2009 senate debate.

[Sarad]

06:22 AM on 12/11/2010

What happened to that tax decrease of about $800 for a family of four? If it's still there, then only Arkansas will have an increase - of about $27. That was one of Obama's accomplishments that almost no one knows about.

[Sarad]

07:33 AM on 12/11/2010

I just noticed that that $800 tax break will be stopped under the GOP-Obama plan.
I went to http://www.mytaxburden.org and entered figures for 20,000 and 40,000 and found that if the tax cuts are allowed to expire, those two would pay $425 more in federal taxes than either the GOP or Dem plans. $100,000 would pay $2105 more and $200000 would pay $5451 more. The payroll taxes were added to that due to the 2% payroll tax holiday, but I ignored that part and concentrated on the federal income taxes. Also, I didn't bother with deductions.Go to that URL and have a little fun seeing what $60000 and $80000 would pay.

[Renegad3]

06:30 PM on 12/10/2010

I think we the poor need to get something done. No more taxes, screw this!

[ChasG]

10:46 PM on 12/10/2010

Then please, lend your vocal support to the Obama compromise, or the middle class will collectively be paying $300 billion a year in tax hikes compared with $70 billion for those earning more than $250K a year.  This is not a time to be raising taxes on the middle class just for some kind of "feel good payback" on the rich (who should pay more, but not at the expense of the middle class).

[carolr51]

10:57 AM on 12/11/2010

After the behavior of the Republicans since the election, it annoys the heck out of me to make any sort of compromise with them-just pass the House version of the bill, which does not include tax breaks for the wealthy. When will it be the right time to fight? I am so mad at Obama that I finally removed the bumper sticker from my car. I am beginning to cringe every time I hear him speak, much like our ex-President!

[SisterAnn]

05:10 PM on 12/10/2010

Did you see the press conference of Obama and Clinton?

They both would cut Social Security for our younger workers to keep this tax cut for the rich.

I am so tired of Bill Clinton nosing in for Blanch Lincoln and things like this horrible bill, designed to ruin Social Security. He is worth 12 million since he left office.

Obama is partying now. He left the conference early to go to a party. I don't think he wanted to answer questions.

[carolr51]

10:59 AM on 12/11/2010

Clinton did the same thing Obama is doing-cave to the Repubs. Remember Glass-Steagal? He could have vetoed that.

[waynesmyer]

06:13 AM on 12/10/2010

BEND OVER AND GRAB YOUR ANKLES AMERIKA! Our beloved POTUS just screwed us in the royal fashion and without even a kiss!

[Congo Line]

05:21 PM on 12/10/2010

Or grease.

[ChasG]

10:49 PM on 12/10/2010

So, I take it you support defeating Obama's compromise and increasing middle class taxes by $300 billion a year.  That's not exactly a middle class victory is it?

[waynesmyer]

05:00 AM on 12/11/2010

As an x-member of the middle class , I make less the 40 grand and my taxes will go up! again! Obama's so-called "compromise" is the old bait and switch con-game that Baby Bush and F-Yew Cheney set up when they stole the election! You may be a "Rope A Dope" candidate, but not me! WHAT IS IT ABOUT ACTUAL FACTS THAT YOU DON'T UNDERSTAND! ROB FROM THE POOR AND GIVE TO THE RICH!

[splashy]

03:09 AM on 12/10/2010

Why am I not surprised? The poor and near poor almost always are preyed upon by the wealthy, who think that those in the lower classes are there to be fed upon by the wealthy. The wealthy feel entitled to dine on the work of the lower classes, who to the wealthy are like beasts of burden, hardly worth thinking about as actual human beings.

Sociopaths are like that, ya know.

[ChasG]

10:55 PM on 12/10/2010

Don't be fooled by the mis-inform­ation in this article, which is designed to make you angry about a non-existe­nt problem" with the Obama compromise­.  There is objective non-partis­an fact to confirm this blog is entirely misleading­. (see link below)
 
Without Obama’s tax cut, the increase in taxes for the middle class alone would be $300 billion a year, virtually nullifying the stimulus package that created over a million new jobs this year.  That means no compromise and we risk more unemployme­nt and recession.
 
Without Obama’s compromise­­­­­, a single person making $20,000 in wages will pay almost $100 a month more income and payroll taxes than he/she would with the compromise (including the payroll tax credit).
 
Here's an easy calculator provided by the Tax Foundation­­­­­, a nonpartisa­­­­­n tax research group in Washington­­­­­, DC.  Try it out on yourself and then tell me you prefer paying higher taxes right now. 
 
http://www­­­­­.mytax­b­u­r­d­en­.o­rg­/
  
I am happy that the extension did not give GOP what they really want-- PERMANENT tax cuts.  That's a GOP concession that may come back to haunt them (if progressiv­e and center-lef­t Dems can rediscover common ground).  The extended tax cuts expire in two years, immediatel­­­y following the 2012 elections, unless congress and the president all agree on something different.  This was brilliant politics by Obama, because the two-year expiration of tax cuts under this compromise guarantees that tax cuts for the wealthy will be a hot-button campaign issue in 2012.

[ruccha]

01:01 AM on 12/14/2010

The form at that link doesn't work.

[starfish80]

01:47 AM on 12/10/2010

Well if I had a jobby job I am sure I would be making 20,000 or less, so this kinda pisses me off

[carolr51]

10:37 AM on 12/10/2010

Though I do not have a job, either, I will be paying taxes on my unemployment benefits, while the wealthy are gifted with millions of dollars in tax savings. I don't even have a mortgage interest deduction any more, because I don't own a home any more. Thank you Congress.

[Sarad]

06:27 AM on 12/11/2010

You're kidding, right? Tax unemployment benefits? That's a new low.

[ChasG]

10:56 PM on 12/10/2010

Don't be fooled by the mis-inform­ation in this article, which is designed to make you angry about a non-existe­nt problem" with the Obama compromise­.  There is objective non-partis­an fact to confirm this blog is entirely misleading­. (see link below)
 
Without Obama’s tax cut, the increase in taxes for the middle class alone would be $300 billion a year, virtually nullifying the stimulus package that created over a million new jobs this year.  That means no compromise and we risk more unemployme­nt and recession.
 
Without Obama’s compromise­­­­­, a single person making $20,000 in wages will pay almost $100 a month more income and payroll taxes than he/she would with the compromise (including the payroll tax credit).
 
Here's an easy calculator provided by the Tax Foundation­­­­­, a nonpartisa­­­­­n tax research group in Washington­­­­­, DC.  Try it out on yourself and then tell me you prefer paying higher taxes right now. 
 
http://www­­­­­.mytax­b­u­r­d­en­.o­rg­/
  
I am happy that the extension did not give GOP what they really want-- PERMANENT tax cuts.  That's a GOP concession that may come back to haunt them (if progressiv­e and center-lef­t Dems can rediscover common ground).  The extended tax cuts expire in two years, immediatel­­­y following the 2012 elections, unless congress and the president all agree on something different.  This was brilliant politics by Obama, because the two-year expiration of tax cuts under this compromise guarantees that tax cuts for the wealthy will be a hot-button campaign issue in 2012.

[ruccha]

01:02 AM on 12/14/2010

Could you please be flagged as a spammer?

[Raymond Medeiros Jr]

10:09 PM on 12/09/2010

http://raymedeiros2010.blogspot.com/

[michael429]

07:40 PM on 12/09/2010

i would like to know what percent of the working poor who are eligible to vote did so in the last election...also, would like to know which candidates the majority of them who did vote supported....sometimes we get the government we deserve....

[Aaron Putnam]

11:29 AM on 12/10/2010

I remember a campaign years ago in Ohio where the republican ran on a platform that he would lower taxes. What he said was true, overall, but the lower taxes were for the rich and in fact, with his plan, taxes for lower income earners would go up slightly. Guess who voted for the guy, lower income earners. Guess who's local taxes went up, lower income earners. The only solace was that they didn't even realize it.

[Truth In Voting]

07:26 PM on 12/10/2010

Here's a breakdown by state: http://www.census.gov/hhes/www/income/data/incpovhlth/2009/stateonline_09.xls

Surprise surprise, low-income Republican states vote against themselves. As do high-income liberal states, but they do so with the desire for more income equality for everyone, not less.

With the way Republicans vote, you'd think it was New York, Massachusetts, and Hawaii that want all these "welfare handouts." Nope, it's them. I live in the most hypocritical redstate of them all: Arizona, who wants less government, less taxes, fewer government handouts.... then has the gall to ask the federal government for billions -- yes, BILLIONS in aid. Like their handout doesn't count, just everyone else's.

[michael429]

09:08 PM on 12/10/2010

the major reason that many "Red" states are red is poor voter turnout among young voters and minorities....