Accountants CPA Hartford CT LLCBarefoot Accountant, William Brighenti, and Accountants CPA Hartford CT LLC
UYGUR: Now, look, I often talk about how the tax deal that President Obama and the Republicans just agreed to, basically redistributes wealth to the richest Americans. And now the new proposed budget cuts takes more money out of programs that help the poor and the middle class.
But there‘s a part of the earlier tax deal that doesn‘t get mentioned enough. Other than giant tax cuts for the rich, there were also some tax increases in the deal. Did you know that?
Do you know what it turns out they affect the most? I hope you‘re sitting down. It turns out the poor and middle class get hurt the most. I couldn‘t have seen that coming. The deal killed what is called the making work pay credit, OK? That used to help lower taxes for lower income Americans.
As a result, a lot of poor people are now actually seeing their taxes go up rather than down after this deal. Here‘s a graph to prove it. Look at this. Two-thirds of the people making less than $18,000 a year will pay more in taxes. So the poor paid, as a percentage, they‘re getting hit the hardest, right?
Forth percent of the people making less than $35,000 will pay more. Twenty percent of the people making less than $64,000 will pay more. You see a pattern here? Twelve percent of the people making less than $104,000 will pay more, but it gets worse. Of the people making more than $564,000 a year, less than two percent of them will see their taxes go up, thanks to this so-called bipartisan tax deal.
Now it is bipartisan, but none of the rest of us agreed to it. So 98 percent of the super-rich get huge tax cuts and two-thirds of the poor get tax increases. Have you ever seen anything less progressive in your life? It‘s a good thing we elected a Democratic president.
Now, I want to bring it the Pulitzer Prize-winning journalist behind the graph we just showed you. He is investigative journalist David Cay Johnston. He won a Pulitzer Prize for his tax reporting and his latest book is “Free Lunch; How The Wealthiest Americans Enrich Themselves at Government Expense and Stick You With the Bill.”
David, first let‘s talk about that graph that we just showed people. So it seems to hit the poor the most. But did everybody else miss this story? Could that really be right? That we just said, hey, you know what, we‘ll take from the poor and give it to the rich?
DAVID CAY JOHNSTON: There was very, very little coverage of this. The reason I put a column on tax.com about this is that journalists missed this as a story. And particularly remember the Republicans‘ pledge, we won‘t raise taxes on anybody. Well, they raised taxes on every third taxpayer in America, 51 million people. And President Obama said, I‘m not going to raise taxes on anybody who makes less than a quarter million dollars a year. Well, he did.
Now, one of the arguments being made by critics of my column today at tax.com is, well, these were temporary tax cuts. You can‘t say they got a tax increase. They were temporary. Guess what? The Bush tax cuts, both the estate tax and the income tax, and the investor‘s tax cuts, those were temporary and they were also extended. This was not. And it‘s part of a fundamental Republican plan that‘s been at work for a long time, Cenk, which is, push the burden down the income tax ladder where people don‘t vote, they‘re not particularly politically active, and relieve burdens who are in the political donor class, the very rich in America.
UYGUR: So, David, now I know as a percentage the number of people that got affected the most were the poor, right? And then the middle class and then, obviously, the rich almost didn‘t get affected at all by the tax increase. Now, the tax cuts, on the other hand, helped the rich the most, right? So we‘ve got that.
But as a percentage of their income, how did it affect poor Americans?
Did it hurt them more in that regard as well?
JOHNSTON: Well, some poor working Americans—remember, we‘re talking about working people—will see their tax bill rise by four percent of their income. Four percent. That is a significant number.
And remember, among the bottom third of workers in America, those are people who make $15,000 or less. Think about that. Fifty million people in America who work make less than $15,000 a year. That group is particularly hard-hit. And their average income is only $6,000 because many of those people want to work full time, can‘t find full-time work. They get cheated on their wages because we‘ve radically cut enforcement of the wage laws in this country. We have fewer wage and labor inspectors than we did in 1941.
UYGUR: All right. So, you know, that‘s the tax angle. But I‘ve just got to ask you, I mean, I thought a Democratic president would believe in progressive ideals. I mean, I‘m not seeing it wrong, right? This is the exact opposite of being progressive, right?
JOHNSTON: Yes, it is. Not only is it the exact opposite, it‘s also not investing in the future. President Obama is not a particularly liberal president, despite all this talk about him being a socialist. Anyone who‘s read his life story, read whom he promoted to the high positions at the “Harvard Law Review” when he became editor of the “Harvard Law Review” will see this pattern of his very closely identifying with Wall Street, wealthy people, and their interests.
And look who‘s surrounded him in the White House? They‘re people from Wall Street.
So it‘s been a consistent pattern of the president‘s. And the president has bought into a budget now in which he‘s suggesting we‘re going to reduce support for college students and graduate students, the people who are going to have the high incomes and the intellect to develop the future economy. My goodness, would you expect that of Obama?
UYGUR: Well, whether we expect it or not, that‘s what we got. So David Cay Johnston, thank you for your time tonight. We appreciate it.
We‘ll be right back.
JOHNSTON: Thank you.