We enter 2011 with a few more dollars in our paychecks. For about 98 percent of Americans, the extension of Bush tax cuts and the new payroll tax holiday will make it easier for us to afford a gallon, rather than a quart, of milk for our families each month, and to fill our tanks almost as high as we did with lower gas prices last year.
(We ought to be consuming less gas and driving electric cars, but I'll leave that for another commentary). On the other side of the Great Divide: the richest two percent of Americans will get vast windfalls from the deal Obama made with the GOP--ample enough to refurnish second and third homes, or get those boats they've always needed.
But studies show us that they won't. They'll sock that money away for the kids' inheritance. We'll get no stimulative boost to the economy, but it sure will help some dynasties from dying. To give the rest of us some lunch money, House and Senate Republicans insisted this Christmas season on stuffing huge lumps of gold into Paris Hilton's velvet stockings. That's what happened when they extended tax cuts for the highest-income Americans and lowered the estate tax, which only gets levied on the wealthiest of the wealthy.
The rich keep getting richer. And richer. But, there is some stimulus in this deal, and it's better than no deal at all. And hey...didn't we all get a boost from the "payroll tax holiday?" We didn't have that before! A holiday after Christmas, for a whole year! Hallelujah, Auld Lang Syne, and Happy Valentine's Day!
Let's hold the confetti for a minute and take a closer look. Just because the deal was better than no deal, that doesn't mean it was a good one, even given this difficult political climate.
In addition to non-stimulative and expensive tax cuts and estate tax favors for the wealthy, this package has another poison pill in it. In the 2009 Recovery Act, the Making Work Pay provision gave those of us making less than $95,000 annually ($190,000 for couples) a refundable tax credit. Income above that level didn't see a tax credit. It was progressive. Those most likely to use the money, stimulating the economy, received the money.
The new tax deal replaces this Making Work Pay credit with the Payroll Tax Holiday.
rest at http://www.truth-out.org/karen-dolan-not-much-celebrate-with-obamas-tax-deal66332
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