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Obama’s $7 A Week Tax Cut Set To Expire

From CNN’s Money.Com:

The tax hike nobody’s talking about

By Blake Ellis, staff reporter

July 27, 2010

NEW YORK (CNNMoney.com) — Get ready for a smaller paycheck.

At least that’s what could happen if Congress doesn’t approve President Obama’s proposal to extend the Making Work Pay tax credit soon.

The credit, introduced last year as part of the government’s stimulus package, boosts paychecks by up to $400 for single filers and up to $800 for joint filers, by reducing the amount of tax withheld from each paycheck.

And that extra $15 bump you’re used to getting each bi-weekly pay period is slated to expire at the end of the year unless Congress votes to extend the credit, much like the Bush tax cuts

Mind you, this $7 a week “tax credit” ($400 divided by 52 = $7.69) is the wonderful ‘middle class tax cut’ that Mr. Obama has been bragging about for the last year and a half.

Notice, by the way, that CNN felt compelled to find a way to double the amount — for dramatic effect.

"You hear a lot about the Bush tax cuts, but surprisingly, the [Making Work Pay credit] isn’t getting as much attention as you would think," said Chuck Marr, director of federal tax policy at the Center on Budget and Policy Priorities.

Under the Making Work Pay credit, tax-payers who make $75,000 or less are eligible to receive the full credit, while higher-earners can receive partial credit…

Because the Making Work Pay credit helps out more than 75% of American households, taking this tax break away will save the government much-needed money, but it is likely to cost a lot politically.

"So many people get this credit, it’s not going to be easy to take it away," said Elaine Maag, a research associate at the [ultra left] Urban [League]-Brookings [Institute] Tax Policy Center. "If it isn’t [extended], people are definitely going to notice and be upset."

Exactly who is going to notice they no longer get a (maximum of) $7 a week? Especially in view of the dozens of other tax increases that are coming at us come January 2007.

If the extension isn’t passed, the 110 million families that received higher paychecks in 2009 and 2010 will be back to where they started and will owe more taxes than they did during those two years.

Again, we are talking about $7 a week, at the most. This is chicken feed (or cracker crumbs) compared to the massive taxes increased which are coming down the pike in January.

And because of the steep cost of keeping the Making Work Pay tax break around — about $60 billion to extend it one year — Marr said he wouldn’t be surprised if Congress doesn’t end up passing the extension.

“$60 billion”? Big deal. Congress just spent $34 billion to extend unemployment benefits for six months. (That is, through the November elections.)

Don’t worry. At the very last minute Mr. Obama will step in and demand that this ‘middle class tax’ cut must be saved at all costs. And a heroic Congress will dramatically vote to extend it into perpetuity. – Without paying for it, of course.

Then Mr. Obama and the Democrats will trumpet this ‘middle class tax cut’ as their great gift to the economy and job creation. Meanwhile, they will let the Bush tax cuts lapse. Tax cuts which actually could make a real difference to people and to the economy.

This is such an easy call, a child of 26 could predict it.

This article was posted by Steve Gilbert on Tuesday, July 27th, 2010. Comments are currently closed.

17 Responses to “Obama’s $7 A Week Tax Cut Set To Expire”

  1. proreason

    What a conundrum.

    Do I need to cut out 1 bbq samwich a week or take the chance that my “middle tax cut” will be retained.

    What would John Kerry do?

    If only I lived on the border, I could get the samwich in Mexico, provided I was willing to risk my life.

  2. NoNeoCommies

    I propose that tax cuts be made like the taxes were imposed.
    Generate tax cuts in tiny amounts, many times during the congressional sessions.
    Attach them to every single bill.
    Claim the government won’t miss the “few cents” you are letting people keep.
    Insist that it is “Patriotic”.

    • hushpuppy

      That’s what the Liberals kept doing every time they were in power in Canada. A succession of nimrods alternately known as Fiberals, and Lie-berals. In fact they were so corrupt one of the more infamous motorcycles gangs put up a page on their website distancing themselves from the kind of crimefests the various Fiberals were known for. At one point, someone nicknamed them the Liberanos as a nod to being worse than the mafia. From this main URL, pick any URL and go exploring:

      http://tinyurl.com/2wtml44

      They’re into graft, payola, drug smuggling accepting and giving cash envelopes of money, etc.

      There’s one party that’s openly socialist/marxist: the New Democratic Party that has the nickname ‘Dippers’. Useless, lazy, indolent, selfish, stupid, rabidly pro-union… in other words just like Obama’s bunch.

      I’m convinced no matter what side of the border you’re in, if you think corruption – it’s all the same pile of manure.

      After almost 60 unbroken years of Liberal mis-rule, they’ve succeeded in convincing a large amount of people the following:

      1) They, the Nanny State know what’s best for you and if you don’t believe it, they’ll ram it down your throat and show you.

      2) When Canada’s Constitution was repatriated from England in the early 1980′s, the two Liberals who wrote up that bit of toilet paper were the Prime Minister Trudeau (whom people used to refer to as turd-eau) and his right hand thug Chretien (who would later be a PM). They fought against putting the word ‘God’ in the Preamble. (You know how the progressives think themselves so enlightened – no need for God when they themselves are designated god.)

      3) Canadians do not have the right to own property. Everything is up for grabs by the gubmint … imminent domain don’t you know.

      4) The idiot PM Turdeau being French hated that our laws and Constitution pointed back to England and not France. In one respect it’s too bad Canada doesn’t have the legal power to appeal to the House of Lords in Britain as the avenue of last resort because the Supreme Court Justices are mostly Libs.

      Any of this sound familiar yet? So in watching the hideous changes Obama is making to this country, all I have to do is think of Canada. And shudder.

      During the last 20 years whenever election time rolled around, Canadians could count on a variation of the crap Al Franken was spewing: The Republicans want to turn the clock back, take away everything you have, all that you worked for blah blah blah. Canadians got to hear the Liberals intoning the “Conservatives have a (whispered conspiratorially) secret agenda.” And the sheeple of Canada for the most part believed it.

      No-one bothered to think one step further and ask someone in the Liberal Party – well how do you know it’s a secret. If you know it’s secret, then it can’t be completely secret…. and if you know what the secret is – then why in hell don’t you clue everyone else in? One Liberal ditz from their west coast came straight out and said ‘they’re (Conservatives) are burning crosses on laws right now as I speak!’

      Yup, they’re portrayed as – you’ve guessed it – racists, sexists and homophobes. The last liberal dingbat who would be king said he was going to put a heavy carbon tax on Canadians – and to make the point clear as to his Kyoto commitment, he named his dog Kyoto. Are you impressed yet? Neither were too many people. He lost the election and Canadians breathed a sigh of relief.

      Now they’ve elected as the head of the Liberal Part of Canada, an idiot of Russian descent who keeps on talking about how his ancestors were minor royalty in Russia back two centuries. He’s maligned Ukrainians (who saw him coming a mile away and tried to warn Canadians what he was all about), has no use for people who work on farms or do physical labor as part of their work. If nothing else, he has all the arrogance you’d expect from a Liberal/Democrat.

      And it goes on and on. Carter, Clinton, Obama or Pearson, Trudeau, Martin, or Chretien. Same dung, different pile.

      And Canadian’s tax freedom day is wobbling into the middle of the first week of June.

      I’m truly worried what it’s going to be like in Jan/11 when it’s frightening enough as it is now.

    • canary

      hushpuppy “3) Canadians do not have the right to own property.”

      Obama said American’s aren’t entitled to their property either, but should be paid a fair price, if the government “needs their property”.

  3. Since this is a “credit” and not a tax deduction, it is simply another way to rob Peter to pay Paul. Mind you it can get you a lot of love from Paul….

  4. hushpuppy

    Dick Morris covered pretty much all of what Bambam is doing by way of taxes, etc in his book ‘Fleeced’…

    …and the msm was complicit in allowing this foreign-born fraud to ‘fundamentally transforming this country’. I keep coming back to this but I have this knot in my stomach that he’s not through ruining this country.

    I wish I could remember who it was that said on either O’Reilly’s or Hannity’s program recently: The most dangerous enemy is not the one outside the country, it’s the one inside your own borders.

    That’s a paraphrase. Perhaps someone here remembers the program and quote.

  5. Mae

    Tax, credit, whatever. Trust me. The $7.69 every week or $15.38 if you get paid every two weeks will be missed immensely. Even $5 a month is missed if you’re living from paycheck to paycheck, with rent being $1500 and take-home is $1800, for example. Certainly depends upon where you live. However, if you live in southern California where you are taxed heavily, every penny, literally, will be missed.

  6. TwilightZoned

    “…Making Work Pay…”

    What a laugh and a half. I understand the need for some taxes but paying
    the government 1/3 – 1/2 of a hard earned paycheck is criminal.

    • proreason

      It’s more than you think.

      Everything you buy has taxes imbedded in it.
      - Corporations treat taxes as a cost and pass them through to you.
      - The company you work for pays 1/2 of your FICA taxes in your behalf. Again, they just pass the cost onto the consumer. Same for FUTA and SUTA.
      - Everything you buy has sales tax imbedded in it.
      - If you own a house, you pay Property Taxes. If you rent, the property taxes are build into the rent you pay.
      - A large part of the cost of medical care is really hiddent taxes. The government underreimburses for Medicare and other welfare programs, so hospitals, doctors and health insurance companies simply make everybody else pay more.
      - The Medicare example also occurs in other lines of business
      - Every product you buy has the cost of litigation built into to it. Lawyers bribe politicians to let them run rampant, so that is another form of taxation.
      - Everything the government touches is rife with corruption. Those costs are also built into the cost of goods and services you buy.

      There are many many more examples. If you can “see” 1/3 – 1/2 from your paycheck going to taxes, the true amount is much more. Even people who think they pay 0 taxes are paying at least 25% of their income in taxes one way or another.

      Of course, it’s a myth that the wealthy pay more than their fair share. It’s the opposite. Their lawyers write the tax laws and the rich pay less % than the poorest of the poor.

      The people who pay more than their fair share are the upper middle class; people who make big salaries or have productive businesses, but who haven’t accumulated estates that they can live on. Since they earn their money, it’s taxed very heavily. Basically, people in the upper middle class aren’t wealthy enough to buy politicians and have armies of lawyers to write the tax code for them.

    • Rusty Shackleford

      Everything the government touches is rife with corruption.

      I remember when I was very young, I had the realization that no government can ever be rid of corruption. I had faith, back then, that the system of “checks and balances” I was told about would keep that from happening in our government.

      But as I grew older I adopted one of my catch phrases: “Never underestimate the ability of humans to game any system”. And they have, and they always will.

      What saddens me the most is the fact that while the conservatives are screaming that so many laws are being broken and ignored that we are living on the brink of disaster when it comes to our freedom.

      The ruling class doesn’t care what it does or how it does it; It just throws in more firewood under the boiler and goes full steam ahead. I still hope that somehow, somewhere, they are also ignoring the iceberg warnings and hit one and sink.

      But, there has to be some huge changes. The republican party must never again try to accommodate the left on anything again. During the Reagan years, there was prosperity for everyone…and…interestingly enough that was a time when I saw “green” technologies really starting to make some headway. Home water heating systems powered by solar, and others. All private ventures but allowed to grow and/or fail.

      Taxes in this nation have gone berserk. And I can only point to the government and say how wasteful an entity it is. It is a junkie addicted to money, OUR money. And no amount is ever enough. They always come for more. And it sickens me that I pay what I do in income taxes knowing that it pays for abortions, drug “rehab”, condoms for “the poor”, and is redistributed to the undeserving.

      Now, it stands to get infinitely worse with hell-care, crap and tax, and all the other socialist programs that the commies in government know will do nothing but suck more money out of my pocket into theirs.

      I would love to hear that somebody came and drilled a bunch of holes in Kerry’s yaawwwttt. It would be great fun to think of ways to cost the ruling class great discomfort the way they script movies. Kind of like what the A-Team used to do with the setups and such.

      I have never resented big business, millionaires, people who have money. But I do resent the ruling class…so if they were hoping to invoke “class hatred:” they’ve got it.

    • canary

      Twilight, financial experts say upper middle-class will be taxed 70%. It’s like working all year, but only getting paid for a couple of months.

  7. David

    “Making Work Pay” uhm.. I am pretty sure I already get paid for working… by my employer. Without it my monthly take home would decrease by 30 bucks. If they agreed to make it illegal for the union (that I don’t belong to) to steal 30 bucks a month from my check I would call it even!

  8. blindboygrunt

    “taking this tax break away will save the government much-needed money.” It blows my mind that anyone could write the sentence this way. So if the government steals more of our own hard-earned money, it will be a savings to them?! WTF? Oh, wait, that’s right. Everything in America, including everything earned by The Worker, belongs to the state. Allowing The Workers to keep any of it is really an expense in the Collectivization Accounting of Obamanomics.

    Good Lord! That a journalist in this country could write a sentence like that…they must really all be Marxists to the core.

    • Rusty Shackleford

      “they must really all be Marxists to the core.”

      They are, bbg, they are.

    • hushpuppy

      “taking this tax break away will save the government much-needed money.” Right. If it saves the government the money, will the government spend it wisely – or will Michelle or Dingleberry find a way to spend it for you.

      Here’s an example: Michelle’s heading off to Spain next week.

      http://tinyurl.com/35l4rnv

      Please note the following paragraphs:

      “Despite the unusual choice of holiday destination, Mrs Obama, who will be on the Costa del Sol between 4 and 8 August with nine-year-old Sasha, has reserved 30 rooms at a five-star hotel.

      It is thought Mrs Obama has booked the rooms at the prestigious Villa Padierna, a golf and spa resort located along the coast from Marbella.

      With a reputation as Spain’s most exclusive hotel, room prices start at 250 euros (£210) for a standard double and rise up to 5,000 euros (£4,175) for a private villa within the gardens.”

      So there ya go – they’re spending the money We the People earned by working for a living. Meanwhile their actions are pure ‘Let them eat cake.”

      Also please note Michelle’s belly. Must be all those tasty carrots she’s eating out of her garden that grows enough food for 200 people. I guess she’s slumming and not wearing her girdle.

      The cost of housing the First Lady and her entourage could raise questions back in the U.S. over the use of taxpayers’s money.

      ‘The First Lady will travel to Spain next week for a private, mother-daughter trip with long-time family friends.

      So is it a private mother/daughter trip, or will it be an all expenses-paid vacation for her and her posse passing as a mother/daughter trip.

  9. bousquem

    Wow, $400 is going to save me a huge amount of money! Yeah right. I’m more worried about getting taken to the cleaners when the Bush tax cuts go away and I see my paycheck really shrink when the goverment starts grabbing even more money. My uncle is a CPA with his own business and he is wildly angry that the cuts are going to expire, of course so are alot of his clients who happen to be small business owners. The economy is past the toilet and somewhere in the S-bend if not the septic tank and the democrats want to make small business owners shell out even higher amounts. It also doesn’t help that people are going to be penalized for being married and having kids with the drop in the child tax credit.

    I could stomach higher taxes (barely) for a time if the economy was in a much better shape and that money was going straight to reduce the deficit. The chances of that happening are about as likely as porcine pilots getting their FAA certification. The democrats probably already have that extra “income” planned for redistribution and other dolist programs in addition to further spending, might as well just have China annex the country at the rate we’re going, they’re already going to own it from all the money we have borrowed from them.




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