Taxing the wallet

January 4, 2013

Payroll-Tax-Cut-ExtensionOvercast, and for an early January morning, a bit on the warm side, considering this is supposed to be winter.

So much for the weather!

Yesterday was payday at the liquor store I manage, and motherf*cker, was it a piss-ant, sad and depressing chore.

(Illustration found here).

We’re a rarity — payday is weekly, instead of the usual normal of every two weeks — and in the pure-ass ugly inherent to the current US political system, writing out pay checks for our small group of clerks, revealed most-vividly just how shitty and nasty it is for the lowest working rung in this mis-aligned economic entity.
This was the first payroll of 2013, and the first without the payroll tax cut, and for workers at the minimum-wage level, it’s a bitch.
From the New York Times last September — even then, the tax was already thought to be not worth the effort by our politicians:

Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs.
That is because the typical American family had $1,000 in additional income from the lower tax.

The White House has not pushed for an extension.
“We’ll evaluate the question of whether we need to extend it at the end of the year when we’re looking at a whole range of issues,” Jay Carney, the White House press secretary, told reporters last month.

Many Republicans vehemently opposed its passage last year, as it would divert money from the Social Security program.
Many Democrats fervently supported it last year but show no such enthusiasm now.
Nancy Pelosi of California, the top House Democrat, has told reporters she thinks it should expire.
Support is lacking for two main reasons.
First, both Democrats and Republicans would rather focus on the broader political and economic issue of the fate of the Bush-era income tax cuts.
These cuts, too, were initially meant to be temporary, but are now deeply entrenched in the tax code and central to the budget battle.
Second, though the economy has not become significantly stronger over the past year and the tax increases in addition to spending cuts coming next year could push the country into a recession, independent economists say that the economy could shoulder the payroll tax increase without undue harm.
Moody’s Analytics, for instance, estimates that expiration of the payroll tax holiday would shave 0.6 percentage point off economic growth, adjusted for inflation, in 2013 — and that the economy could safely stomach government spending cuts and tax increases totaling up to 1.5 percentage points of economic output.
Still, expiration of the payroll tax cut will increase the taxes of millions of middle-class families.

Yes, indeed, like me and my liquor store clerks — we be f*cked.
The so-nuanced ‘fiscal cliff’ wasn’t all that cliff-y as President Obama jetted off back to Hawaii and vacation, signing the deal via auto pen — no hurry there!

The payroll tax ‘holiday’ was started in 2010, later extended, and dropped the payroll tax from 6.2 to 4.2 percent, which to a $7.25-$8 an hour person is in what Joe Biden might call, a ‘big fuckin’ deal.’
And to me, it’s $10 a week less in my paycheck, $40 a month, and $520 a year just gone away.
During this entire ‘fiscal cliff’ bullshit — a made-up crisis by our incompetent, corrupt leaders — this little, but highly-valued payroll tax thing was discussed way-little, if at all.

Payroll taxes hurt like shit if they are snatched away. Amy Davidson at The New Yorker looks at “the strange invisibility of the payroll tax,” and felt my pain:

And yet this deal, and Obama’s own agenda, have been informed by the G.O.P.’s delusions, to a tragic degree.
As John Cassidy explains, Obama gave up a great deal, conceding that people making $450,000 a year were off-limits for rate increases.
More outrageously, cuts to the already highly regressive payroll tax are being allowed to expire, meaning that they will rise from 4.2 per cent to 6.2 per cent.
Obama didn’t even fight for them.
In his statement Tuesday night, Obama described the bill as “preventing a middle-class tax hike” that could have hurt families and sent the country back into a recession; that is true, but it allowed another middle-class tax hike that could have the same effect.
He also said that middle-class families “will not see their income taxes go up.”
That is false, unless one goes along with the idea—and most of Washington does—that payroll taxes, which are on income and levied by the federal government, are not federal income taxes.

The dismissal of payroll taxes as something meaningful is even broader, though; it is deeply, pathologically woven into the Republican world view.
When Mitt Romney, speaking at a fundraiser in Florida, complained that forty-seven per cent of Americans paid zero income taxes, he wasn’t counting the many Americans who did pay payroll taxes.
Whenever Republicans rant about the misguided untaxed masses, they, too, have generally discounted the money that most working Americans think of as their taxes.
Is it that they consider it pocket change?

Pocket change for a lot of people is the pile of coins on the counter — all they have in the fucking world — hoping they have enough for a pack of generic cigarettes.
I say to Congress and Obama: Fuck You!

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