President Works With Republicans To Reduce Workers’ Share Of Corporate Income

[sasha031]

The Great Compromise to give tax cuts to rich people includes a poisonous sop to the middle class, a temporary payroll tax cut. It is sure to decrease the income of millions of Americans for the foreseeable future. The way it works is that for the next year, people get a 2% reduction in their FICA taxes, and the government will put a like amount into the Trust Fund.The Obama Administration sent out a pair of Senior Administration Officials to explain the glories of the Great Compromise to bloggers, so I asked what part of the Great Compromise would not have been available if the Administration had not capitulated. The SAOs didn’t agree that they were capitulating, but they did say that they thought they would not have gotten an extension of the tax cuts in the stimulus bill, and might have not gotten an extension of unemployment benefits, and might have gotten a longer extension of the tax cuts for the rich.

I asked why employers would not just say to a new hire, well, you are getting a FICA cut, so I’ll just pay that much less. After all, that is what you would expect from a basically Republican plan. SAO explained that everyone gets the cut, not just new hires, backhandedly admitting that employers would do that to new hires. My bad for not asking a better question.

I should have asked why employers wouldn’t say: you don’t need a big raise, your FICA taxes were cut. Look how that works out. Next year, it’s raise time, and your base pay is lower because you didn’t get a decent raise this year. Your employer tells you you get a 3% raise on that lower base. Every year going forward you make less money than you would if you had this year’s whole raise. Of course, the same thing happens to new hires.

Jed Lewison of DailyKos asked why the 2% FICA cut would not become the new normal, and when it was time to end it, wouldn’t people say Obama is raising taxes? SAO thinks that is a good question. Too bad he didn’t have an answer. If the tax is reimposed in a year or two, that will be a double hit, increased taxes on reduced wages.

Oh, I almost forgot. The other SAO explained that the President is really serious about raising taxes on the rich, and will be fighting for that for the next two years.

http://firedoglake.com/2010/12/07/president-works-with-republicans-to-reduce-workers-share-of-corporate-income/

[dkf]

1. Lets just cancel the entire package. No unemployment extension no tax cut extensions

Just suck it up and do with what we have.

If people suffer, then that is the cost we pay for our zeal to tax rich people.

[sasha031]

2. I think the reduction of FICA is a mistake,

it undermining the Social Security people will need desperately, especially will the the aging bloomers.

Haven't the rupub's been advocating the elimination of the minimum wage? It could this deal is helping them achieve their goal.

I've heard even liberal radio selling this as a pay raise.

[laughingliberal]

3. "it undermining the Social Security people will need desperately, especially ... aging bloom"

I believe that's the plan.

[dkf]

4. 42% don't pay federal taxes.

You can't reduce their taxes any further. The only way they get money is by cutting their social security tax.

Would you rather they not get anything? That is actually a perfectly legitimate stance but doesn't seem in line with progressive thought.

[jtown1123]

5. People will not spend any small return from tax cuts because of the unemployment crisis.

Money would be better spent investing in government projects that put people to work immediately. Any small amount of money I receive in a tax break will go straight to paying down credit cards and other necessary expenses that do not bolster the economy.

[dkf]

6. Not gonna happen. It's tax cuts for stimulus or nothing...what do you choose?

[Donnachaidh]

8. *stimulus* is becoming a buzz word for gifting the elites

:eyes:

[dkf]

10. Well I guess you pick nothing. Fine by me.

[Donnachaidh]

12. snit away -- but the point is made -- gifting the rich is far more important

corner's THAT way :rofl:

[Donnachaidh]

7. the 99ers were forced to suffer -- where was the outrage THEN?

Disengenuous bullshit. Let's just hire actors to wear the hairshirts for this kabuki *governing*....

[dkf]

11. I kind of don't understand how people don't suffer without a job, especially for that long.

Being unemployed sucks and it is a bummer.

[Donnachaidh]

13. comprehension lacking?

Or just ignoring the point -- this admin did NOTHING for the 99ers -- EVEN in this so called deal. I guess when they *disappear* 4 million people they STAY *disappeared*, right?

Using a few to cover your ass to provide gifts to the elites is despicable. And sadly laughably brazen. Especially with all the followers who have also *disappeared* facts.

[ladjf]

9. When Obama praised Reagan, we should have seen the

handwriting on the wall.

"Recently Barack Obama, who has admitted to putting Ronald Reagan on the list of politicians he most admires, has been getting blasted by his opponents in the Democrat primary."



http://sayanythingblog.com/entry/obama_praises_reagan_his_fellow_liberals_go_nuts/

He was a Reaganite all along. Nothing has changed.

America, we've been duped.

[walldude]

14. Yup, I feel like an idiot...

actually I am an idiot. I thought he was just kidding around when he said that about Reagan. I mean does anyone really believe Reagan's economic policies helped the country? I guess they do. How blind can you be.

[ladjf]

16. I thought that perhaps it was some subtle political move.

All during the campaign my wife kept saying "we don't know who he is". Now we know.

[WhoIsNumberNone]

15. So Obama's going to keep fighting that upper class tax cut, eh?

Despite having locked them in for the rest of his term? Presumably once we re-elect him, he'll get right on it- Assuming of course that we also give him 3/4 majorities in the House and Senate so nobody will talk mean about him...