Olbermann, last night:
The left isn't all in unison, however. Randi Rhodes made a compelling case on her show yesterday FOR the tax cut deal, but she's betting on this being enough of an economic stimulus to bring the economy enough into recovery in time for the 2012 election. She's also not taking into account how the "payroll tax holiday" that's part of this deal is yet another means of starving Social Security, all the better to further the Obama plan to gut it to the bone. And Lawrence O'Donnell desccribed it as the best deal Obama was going to get. Still, it's hard to see Obama's near-complete capitulation to the Republicans, when taken in the context of the health care sellout, as anything other than further fuel for the notion that Obama is simply amassing chits to be cashed in for a fat Wall Street job at the end of his term -- which after his smackdown of the very people who voted for him yesterday, seems more likely than ever to be coming sooner rather than later.
If this is the best deal Obama could get, then it's time to pack up any notion of this country as a place of opportunity, of anything other than a medeival-style plutocracy, with the wealthy amassing ever more riches and EVERYONE else scrambling for scraps:
The tentative deal includes a two-year patch for the alternative minimum tax, a reduction in the payroll tax and a plan to reinstate the estate tax with lower rates and higher exemptions than in 2009 — all of which will offer far more savings for high earners than those in the low- or middle-income bracket.
The wealthiest Americans will also reap tax savings from the proposal’s plan to keep the cap on dividend and capital gains taxes at 15 percent, well below the highest rates on ordinary income.
And negotiators have agreed that the estimated $900 billion cost of the cuts will simply be added to the deficit — not covered by reductions in spending or increases in other taxes. That is good news for hedge fund managers and private equity investors, who appear to have withstood an effort to get them to pay more by eliminating a quirk in the tax code that allows most of their income to be taxed at just 15 percent.
In fact, the only groups likely to face a tax increase are those near the bottom of the income scale — individuals who make less than $20,000 and families with earnings below $40,000.
The proposal does not include an extension of Mr. Obama’s signature tax cut, the Making Work Pay credit, which provided a credit of up to $400 for individuals and $800 for families of low and moderate income. Instead, the plan creates a one-year reduction in Social Security payroll taxes, which are generally levied on the first $106,800 of income. For an individual earning $110,000, that provision would reduce payroll taxes by $2,136.
Although the $120 billion payroll tax reduction offers nearly twice the tax savings of the credit it replaces, it will nonetheless lead to higher tax bills for individuals with incomes below $20,000 and families that make less than $40,000. That is because their payroll tax savings are less than the $400 or $800 they will lose from the Making Work Pay credit.
“It will come to a few dollars a week,” said Roberton Williams, an analyst at the nonpartisan Tax Policy Center, “but it is an increase.”
To the wealthiest Americans, however, an assortment of breaks is available.
If Obama thinks that raising taxes on the very people in the flyover states who have joined up with the teabaggers in their rage at government are going to vote for him after seeing THEIR OWN taxes go up, then he's even more delusional than we thought.
UPDATE: Go read Nancy Altman (Chairman of the Board of the Pension Rights Center) over at FDL about what the "payroll tax holiday" means for the future of Social Security.