Let the Bush Tax Cuts Expire in 2010 or Make Matters Worse

Obama's Deal will Raise Taxes for Some Low-Income Workers

The tax deal struck this week between the White House and congressio­nal leaders has a little bit for most taxpayers in the country. But some of the nation's poorest workers will actually end up worse off.

The president'­s proposal, struck in a deal with congressio­nal Republican­s, would lower the Social Security taxes on all workers in the nation by 2 percentage points (thereby setting up Social Security for decimation­).

At the same time, the proposal eliminates the "Making Work Pay" tax credit that was originally part of President Barack Obama's 2009 stimulus package and reduced Americans' taxes by up to $400 for an individual or $800 for a couple.

When comparing the Social Security reduction versus the current tax credit, middle- and upper-inco­me Americans will fare far better under the new proposal. But some lower-inco­me workers won't.

The break-even point is $20,000 for an individual and $40,000 for a couple. All other things being equal, make less than those figures in a year, and your taxes will go up come Jan. 1, 2011. Make more and they'll go down.

"It's disappoint­ing," said Michael Linden, the associate director for tax and budget policy at the liberal Center for American Progress. "These are people working really hard ... We're asking minimum wage workers to pay slightly more in taxes."

Added Roberton Williams, senior fellow at the Tax Policy Center, a joint venture of the Urban Institute and the Brookings Institutio­n. "It's not a huge increase. But if you're only making $10,000 a year, and your taxes go up a few hundred dollars, that's noticeable­."

Read the Article at HuffingtonPost