Members of congress become targets for supporting middle class tax cuts

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OBAMACARE IS A MAJOR TAX CUT FOR MIDDLE CLASS FAMILIES

Angela Guo/guest blogger for Think Progress

Following the Supreme Court’s Affordable Care Act ruling, Republicans — including Mitt Romney — have vigorously insisted that the Affordable Care Act is a tax on the American people. But instead of being a tax increase, Obamacare will provide millions of families with large tax credits to make health care more affordable. Only about 1 percent of Americans who could afford health care but don’t buy coverage would have to pay the tax, and the penalty would only be an average of $600. The Center for American Progress shows how Obamacare is actually a major tax cut for many families:

GOP Leaders Still Holding Middle-Class Tax Cut Hostage For Oil Pipeline, After Democrats Make Major Concession

By Pat Garofalo/Think Progress

Congress may have come to an agreement on a $1 trillion bill to keep the government funded beyond midnight (when the current round of funding runs out), but there is significantly less common ground on extending the soon-to-expire payroll tax cut. Democrats, in an attempt to prevent a tax increase on working Americans come year end, have dropped their demand that the extension be paid for via a tiny surtax on income in excess of $1 million.

So does that mean Republicans have dropped their demand that an extension be tied to the approval of the Keystone XL oil pipeline? Of course not:

House Speaker John A. Boehner said Friday that his chamber will not sign off on an extension of the payroll tax cut sought by President Obama without including a provision to speed construction of an oil pipeline, which Obama has opposed…“If that bill comes over to us, we will make changes to it, and I will guarantee you that the Keystone pipeline will be in there when it goes back to the United States Senate,” Boehner said.

Senate Minority Leader Mitch McConnell (R-KY) joined in, saying, “Frankly, I will not be able to support a package that doesn’t include the pipeline.” Republicans claim that the oil pipelinewill be a job creator, but the only independent analysis into the pipeline found that just 500 to 1400 temporary construction jobs will be created, “with a negative long-term economic impact.”

In order to attain its beloved pipeline, the GOP is willing to raise taxes on 113 million households next year, costing the average family $1000. At the same time, the GOP adamantly refused to consider a surtax on the very wealthiest Americans. This has become the standard operating procedure for the GOP this year: exploit expiring provisions (or the imminent expiration of U.S. credit) to force through a conservative agenda. In this instance, it’s middle-class taxpayers or the environment that suffers if Republicans get their way.

UPDATE

At TPGreen, Brad Johnson notes that GOP presidential front runner Newt Gingrichendorsed attaching the pipeline to the payroll tax bill.

Romney’s ‘Middle Class Tax Cut’ Would Provide No Benefits To Most Of The Middle Class

By Pat Garofalo/Think Progress

During this week’s GOP primary debate, Newt Gingrich asked Mitt Romney why he has proposed eliminating capital gains taxes for only those making less than $200,000 annually (which is a key component of Romney’s economic plan). “If I’m going to use precious dollars to reduce taxes, I want to focus on where the people are hurting the most, and that’s the middle class,” Romney said. “The people in the middle, the hard-working Americans, are the people who need a break, and that is why I focused my tax cut right there.”

Romney may think he focused his tax cut on the middle-class, but according to a ThinkProgress analysis of Tax Policy Center data*, nearly three-fourths of households that make $200,000 or less annually would get literally nothing from Romney’s tax cut, due to the simple fact that most of those households have no capital gains income

To be exact, 73.9 percent of the households upon which Romney “focused” his tax cut will see zero benefit from it. The table below shows how few households in each income bracket would be affected by Romney’s cut:

For families making between $40,000 and $50,000 annually, Romney’s tax cut comes out to awhopping $216 per year. Meanwhile, the payroll tax cut enacted by the Obama administration in 2011, which Romney derided as a “temporary little Band-Aid,” gave those same households a tax cut of $800 to $1,000.

According to the Tax Policy Center, 67 percent of the entire benefit from lower capital gains tax rates goes to millionaires. 75 percent of the benefit goes to richest 1 percent of Americans. So lowering the capital gains rate for those making less than $200,000 doesn’t do many people any good at all. In a tax plan that costs nearly $7 trillion, you’d think Romney would have found a way to focus his “focused” middle-class tax cut a bit better.

*Of the 155,943,000 households making $200,000 or below, just 40,703,051, or 26.1 percent, would see any tax cut under Romney’s plan. TPC’s data is based on “cash income,” while Romney’s tax is based on adjusted gross income, but widely speaking, the distribution is the same.

Bill To Extend Only Middle-Class Tax Cuts Blocked In The Senate

Today, the Senate held two separate votes on the Bush tax cuts, but ultimately failed to extend any of the cuts that will be expiring at the end of the year. The first piece of legislation, which would have extended the Bush tax cuts for everyone making less than $250,000 per year, was defeated 53-36, falling seven votes shy of the 60 necessary to invoke cloture. Sens. Joe Manchin (D-WV), Russ Feingold (D-WI), Ben Nelson (D-NE), Jim Webb (D-VA) and Joe Lieberman (I-CT) joined all the Republicans in voting no. Eleven senators, all Republicans, did not vote. The second bill, which would have extended the tax cuts for everyone making less than $1 million, was defeated 53-37. As CNN noted, “Despite the realization that neither would get the 60 votes to succeed, many Democrats said before the vote they wanted to get on-the-record in support of extending the lower rates to lower earners.” On Thursday, the Housesuccessfully passed a bill extending only the middle-class tax cuts.