Friday, February 08, 2013

NOBODY COULD HAVE PREDICTED THAT SUBSISTENCE-LEVEL WORKERS WOULD FEEL HURT BY A TAX INCREASE

Taegan Goddard notes the following:
Two new polls show President Obama's approval rate under 50%: Fox News has it at 49%, while Quinnipiac finds it at 46%.
Quinnipiac says Obama was at 53% approval in December, and 40% approval; the numbers are now 46%-45%. Gosh, what happened? You think maybe it might be this change that happened as a result of December's budget deal?
... at street level, the pain from the expiration of a two-percentage-point break in Social Security taxes in 2011 and 2012 is plain to see.

"You got to stretch what you got," said [Eddie] Phillips, 51, a front-desk clerk and maintenance man for a nonprofit housing group who earned $22,000 last year. "That little $20 or $30 affects you, especially if you're just making enough money to stay above water." So he has taken to juggling bills, skipping a payment on one this month and another next month.

"I'm playing catch-up each month," he said. "You go to the supermarket and you can't spend what you used to."

Jack Andrews has it slightly better than Mr. Phillips. He earns a bit more than $40,000 a year manufacturing ceramics in a local factory, but because his wife, Cindy, is disabled, he is the sole breadwinner. Something had to give now that he is earning about $800 less a year, or $66 a month, and it was the couple's monthly night out.

"It's just gotten out of reach," Mr. Andrews said....

In Medford, Ore., Darchelle Skipwith had to scrap her monthly budget and start over when the law changed.

She is buying less meat; driving less often to see her sister, who lives 12 miles away in Eagle Point; and putting less away in savings. In August, Ms. Skipwith, 42, hopes to get a raise of 50 cents an hour at her job stacking shelves at Walmart, which should help make up the difference.

For now, she has no choice but to change her daily routine.

"I added it up -- it's about $75 a month," Ms. Skipwith said. "That’s not a lot for some people, but mine is the only paycheck. I don't have extra money coming in."
I know the payroll tax cut was supposed to be temporary. I know Republicans demand insane concessions, and we were fortunate that a deal could be struck that avoided a major financial catastrophe.

And yet this regressive tax increase went through practically without comment, and all the Very Serious People thought it was good:
"I don't see any reason to consider supporting its extension,” said Timothy F. Geithner, the Treasury secretary, in testimony last year. Even Nancy Pelosi, a reliable liberal who leads the Democratic minority in the House of Representatives, was for letting it expire.
But now they're shocked that it's having an impact:
Complete monthly data for retail sales in January will not be released until later this week, but the weekly data already available for last month showed a steady deterioration in shopping activity.

"There is something going on," said Chris G. Christopher Jr., senior principal economist at IHS Global Insight. "The payroll tax seems to be cutting into things."
Gosh, who'da thunk?

If you make up to $113,700, you pay it on every dime you earn. If you make, say, $1,000,000, this increase doesn't apply at all to the last $886,300 you make. (And if you're self-employed, you pay both your share and the employer's share, because you're considered your own employer.)

And so:
... in a Thomson Reuters/University of Michigan survey of consumer sentiment released on Friday ... [w]hen asked how their financial situation had changed in January, 32 percent of people with incomes below $75,000 said their pay had dropped, compared with 13 percent who said it had increased. By contrast, 38 percent of people earning more than $75,000 said their wages had gone up last month, and 23 percent said they had gone down.

"We rarely see such divergent trends," Dr. Curtin said. "Mostly it was the payroll tax hurting the lower incomes...."
Ya think?

We have one party that despises the non-rich and another party that cares about the non-rich some of the time, while giving the have-nots the back of its hand the rest of the time. I wish this fact got one-thousandth of the attention on the left that drones get.

10 comments:

Victor said...

Our politicians spend so much time glad-handing rich people for campaign contributions, instead of spending time talking to constituents, that they only hear one side of the economic story - and it ain't the side of the working stiffs and the poor.

So, in their oblivious politican money-bubble, they constantly do things that hurt the vast majority of their own voters.

And, what's really both stupid and scary, is that too many of those voters don't care - as long a the "Blah" and Hispanic people are hurt just a little bit more.

Amreicans are a very, very stupid people.

aimai said...

I don't think the Democrats who were involved in this had any illusions at all about the signficance of the payroll tax cut--it was originally marketed as the only form of stimulus hey could get past the Republican house. It contained within it the very, very, very, dangerous seeds of pushing SS and Medicare off books and detatching tax payers from the real rewards of the payroll tax but it was a risk that Obama and the dems had to take in order to get it as a form of stimulus. At the time everyone kept saying "this is the only tax repeal the GOP won't support" and it was seen as a way to jam the GOP up.

It was going to expire at a certain point and if it didn't it was going to com eout of SS and medicare later.

People are poor and getting poorer. The dems know that, the left knows that--you can't fix things with a tax cut which is nothing more than shifting the tax burden off into the future. Obama and the dems are trying to fix it with a true tax shift form the working poor to the rich. This really isn't beyond them--they get it. Its just that they can't fix it.

I agree with you that I wish the left cared half as much about economic issues as they do about political ones but its really different people, not the same political movement.

Steve M. said...

its really different people, not the same political movement.

That's the biggest failure of the left by far -- forgetting about economic issues altogether.

Lit3Bolt said...

I think it's not so much a "failure" by the left as just the switch of political forces, population density and race relations. The New Deal and SS were intended to help poor whites, and blacks were only grudgingly put on the programs. The left does care about the poor, but to a great degree only poor minorities and city dwellers, while poor whites are now almost universal Republicans and Republican policies dominate as soon as you hit most large city limits.

There cannot be a true economic populist movement until poor whites and poor minorities set aside their differences, and the entire "culture war" is focused that they never, ever unite in economic common interest.

Eric said...

As the economy slips into negative territory and the unemployment rate inches up again, the truth can be told that the payroll tax cut "stimulus" was anything but.

On top of that, by stealing the payroll taxes that would have gone into Social Security, the SS Trust Fund will hit zero a couple years sooner. In 2033, only 75% of promised benefits can be paid out. This will fall (drumroll) disproportionately on lower-income Americans who depend on Social Security the most.

Oh but only one political party cares about the poor. Cares so much that it saddles 'em with a moribund economy, slashed entitlements, and crushing debt.

Good intentions!

aimai said...

There's no such thing as "the left" in that sense--the Unions are declining in membership and the actual poor people? they aren't political actors at all. You can't have a robust "left" that is other than an intellectual excercise focused on boutique issues if the actual poor won't commit to organizing and fighting for their own lives. I don't blame some ivory tower marxist for the failures of the workign class in the US--at some point people who have routinely let themselves to lied to and suborned by preferential race treatment and homophobia have to answer for their sucker-tude.

If the working class won't identify as working class, and won't turn out to vote for working class issues but instead is willing to fight and die for racism, hompohbia, sexism and a little salvation its not the fault of the god damned ACLU.

Steve M. said...

If leftists can get worked up about a war whose bombs are falling thousands of miles away, what on earth prevents them from getting worked up about the economy?

Yes, the poor need to fight for themselves. But somebody needs to lay out a narrative explaining who's screwing them, how, and why. And nobody's communicating that message.

Steve M. said...

Oh but only one political party cares about the poor.

Neither party cares enough. One party is indifferent, the other party actively malignant. Choose your poison.

Examinator said...

Personally I'm in favor of mandatory Black and white hat wearing by the politicians so the punters can tell the difference between the goodies and the baddies.
A. the old whites will be placated with the movie nostalgia fantasy simplicity (good ole days).
B. The citizen (those that STILL CAN ) can simply vote for the white hats. It makes no difference anyway. Because Politics is as Douglas Adams said in his 'hitch hikers guide to the Universe' series, is Someone Else’s Problem ( SEP) anyway.
All we have to do is moan about it, and the 'goodies' (the politicians) will fix it (sic) after all the holy ancient Constitution and the fore fathers (who were without any personal or human shortcomings) divined every thing even that which didn't exist (sic) or that which did but doesn't now .

Democracy is by definition not a spectator sport where one can sit in the bleachers feasting on hot dogs, popcorn and beer (the modern day equivalent to the Circus Maximus).

I am reminded of the axiom 'all that evil need to succeed is for good people to do nothing'.
By 'evil' I mean those who have a vested interest (be that greed or fear)'.
Greed I define as those who place THEIR interests so far above that of the purpose of society as to actively (either by intent or by deliberate myopic actions) subvert it.

To paraphrase the great white democrat godling “JFK” “ask not what SE (someone else) can do for you, but ask what can * I * do to stop being the part of the root cause?”

Disasters like the Political System don't happen with by a single event that we can't change but as RESULT of many little ones that we can.
i.e. if one looks at the firearm problem in recent history the enforcement of the 20 plus laws have been neutered by an amendment hidden in a funding bill here and a minor change there.
I'm deeply ashamed that up until Sandy Hook “we the good people” have simply not had the concentration span or the balls of a gnat to stand up to the “evil doers”.
We have allowed America and Americans to believe its own rhetoric that we are special. Up until not the consequences of this arrogance has been born by Non Americans but now the chickens have come home to roost. We have allowed our own paranoid; to spy, kill us with impunity; deny us the the right to know including what is being done in our name; have some of the most avaricious, unaccountable least responsible to flourish and now take from the poorer what little they have (including their hope). And all this why? Because we believe our selves exceptional above all others ...and we wonder where the right got the notion from? We allowed it because it felt good!
And when our invincibility was challenged and shown to be delusional... we over reacted allowing the inmates to run the asylum. Hyperbole...not so much . Think about all that we are upset about here is and has been done to others by us (in our name) exponentially. It is OUR fault not someone else (write in any scape goat [less powerful] group).
Um, have a nice day

Philo Vaihinger said...

"We have one party that despises the non-rich and another party that cares about the non-rich some of the time, while giving the have-nots the back of its hand the rest of the time. I wish this fact got one-thousandth of the attention on the left that drones get."

Class war?

Neither the media nor the serious people nor the leading liberals, truth be told, want to go there, very much.

They prefer to drone on about drones.

And then gays in the boy scouts, global warming, immigration, women in combat, race, civil liberties, gun control, and the punctilious observance of liberal rules of moral warfare.

Did I miss anything?

Probably.

The last thing liberals want to do is fight the class war.

Or even face it.

Booman, Atkins, and others spend plenty of time encouraging Democrats to neglect the working class - 'scuse me, that's the white working class - even more than they now do.

Remember card check?

And how much help has the Democratic Party or the national media liberals been publicizing and resisting the on the whole successful class war of the Republicans in state governments over the past several years?

I wish they spent half the attention on the attacks on unions and pensions that they spent on attacks on abortion rights.

Not even close.