payroll tax cut vs. making work pay credit

the MWP credit was equal - $400 per person on income from $6,452 to $95,000. This new credit is much more unequal. Now the worker making $6500 does not pass go, does not collect $400. Instead they only get $130. And now the worker making $400,000 a year does not get zero. Instead they get $2,136.

Here's a more detailed comparison using household income from 2005. Note that household income is not exact since some households have one paycheck and others have more than one. Some low income households got $800 from MWP and will get less from this proposal. Also, I have no way of knowing how much household income is from wages (or self-employment income) and how much is from interest, dividends, rent, capital gains, etc. (all of which pay zero FICA taxes).

number of households *** top income *** MWP *** PTC
(in millions)

.190 ****** $2,500 **** <$155 **** <$50
1.389 ***** $5,000 **** <$310 **** <$100
2.49 ****** $7,500 **** <$400 **** <$150
3.36 ***** $10,000 **** $400 ***** <$200
4.103 **** $12,500 **** $400 ***** <$250
3.543 **** $15,000 **** $400 ***** <$300
3.760 **** $17,500 **** $400 ***** <$350
3.438 **** $20,000 **** $400 ***** <$400

these 22.27 million of the poorest working households in America are getting a tax increase under the Obama plan. Two people making minimum wage used to get a tax cut of $800. Now they only get about $600. So they get a tax increase of $200. Something a multi-millionaire is not going to face.

let me skip the 61.49 million households of the middle class from $20,000 to $80,000, some of whom might be gaining, and some losing. A working couple with income of $36,000, for example would get $800 for MWP and only $720 for PTC. Let's look at over $80,000.

5.244 **** $90,000 **** $400 ***** $1600 - $1800
4.068 **** $100,000 *** $400 ***** $1800 - $2000
1.194 **** $150,000 *** $0 ******* $2000 - $3000
3.545 **** $200,000 *** $0 ******* $3000 - $4000
1.325 **** $250,000 *** $0 ******* $4000 - $4,272
1.699 **** more ******* $0 ******* $4,272

So Obama's compromise also includes a tax increase for low income working people combined with another tax cut for households with incomes over $80,000 (the top 25% of households).

Maybe 'compromise' is just another word for 'unconditional surrender'.

To quote Joe Biden again. "Failure at some point is inevitable, but giving up is unforgiveable."

This shit makes me so mad I'm trying not to think about it too much, so it's hard for me to dig out the details myself.

except for a few unrecs.

You should be comparing the payroll tax holiday with NO MWP tax credit, since that was the choice.

But Obama compromised to get another $4,000 to people making over $100,000 a year. Those same relatively high income households get thousands from the Bush tax cuts, while people on the bottom get $300 plus $500 per child with certain restrictions. And 20 million low income households will be paying more in taxes in 2010 than they did in 2009. But they will probably still be included in the 95% who got a tax cut.

increase.

But the cutoff where they break even is still around 20 thousand. So people over 20 thousand will get over the 400 dollar credit they got before.

and surrender.

And some people over $20,000 were getting an $800 credit, which will now be reduced. Unless the Republicans do us a favor and reject the offer of the head of the working class on a platter.

If you make more than 8000 per year and are employed or unemployed it's more money in your pocket

and I am just looking at the financial picture of THIS PART of the deal. A part that even a smart guy like Joel Klein is calling "progressive".

Well a tax increase at the bottom and a larger tax cut at the top does not look very progressive to me.

Plus, it does not look like a better deal for me, and I make $15,000. I am losing $100. You may think that I am gaining another $300 because of the preservation of the 10% bracket on the first $6,000 of taxable income, but that is not the case. Whether the rate is 10% or 15%, I use the retirement contributions credit to knock my tax bill down to zero every year.

Less than $5.97 billion will go to the 22 million households making less than $20,000, on the other side of the coin AT LEAST $22 billion will go to the 7.8 million households who make more than $100,000. With another $15 billion plus going to households who make between $80,000 and $100,000 (9.3 million households).

So of the $120 billion this is said to cost, the bottom 20% gets less than 5% of it and the richest 10% get more than 18% of it, and the richest 20% will get more than 31% of it.

and it irks me to see people on DU praising this measure as if it is pro-worker and progressive. From what I can see, it is neither. $120 billion spent on the Making Work Pay credit would provide more benefits to people below the median income.