Repercussions of the New Tax Law Would Leave 51 Million Americans Worse Off
Most liberals and progressive Democrats were angered by the recent extension of the Bush tax cuts for America’s most wealthy. The excuse, offered by the White House and a good number of Democrats, was that the extension would also benefit the middle and lower class.
That conclusion seems to fall outside of almost every analysis I read. Indeed a study by The Tax Policy Center, a non-profit, non-partisan research organization, concluded that 51 million mostly lower-income Americans (those making $40,000 or less) will do worse under the new tax law.
In a recent article, Consumer Reports explains the finding: “That’s because the Making Work Pay credit, a temporary tax credit that’s been in effect for the past two years, is going away as of January 1, 2011. That credit provides up to $400 per individual, $800 per household, for all eligible workers. And it adds more to the pockets of households making between $20,000 and $40,000 than the new, 2 percent drop in the Social Security payroll tax.”
If the Democrats are serious about “hope” and “change,” they’re going to have a whole lot better than that.
To stimulate our economy, as Consumer Reports lays out, we need to provide more tax cuts to lower, middle and upper-income Americans. The resulting spending would catalyze a stimulus. With the new tax law, there is no bang for our buck.
That’s my take, what’s yours? Please chime in using the comments section below.