Wednesday, December 15, 2010
Poor Will Pay More
In 2009 and 2010 lower income people were eligible for a "Making Work Pay Tax Credit". It provided a tax credit of up to $400 per person and $800 per couple. So what happened to it? It has been replaced by a "temporary" 2% reduction in Social Security withholding.
So, what's so bad about that?
Making Work Pay gives the most help to those that need it the most. SS withholding reduction gives help to those that need it the least. Once again the higher wage earner wins out over the lower wage earner.
David Dayden over at FDL shows a chart by Nancy Altman of Social Security Works that compares the two programs. Here is the chart.
Again, we see things weighted to the top while the people who need the help are at the bottom.
The 2% reduction in SS withholding is being touted as a benefit for the poor. Where is the benefit? People making under $20,000 per year will get an effective tax INCREASE, while people earning over $106,800 will get an additional $2136 per year.
For republicans, this is normal. For Democrats, this is disgrace.