Fiscal Cliff Tax Hike to Hit $30,000 Worker Harder Than $500,000 Earner
Last week, President Barack Obama said that under his fiscal cliff deal “more than 98% of Americans and 97% of small businesses will not see their income taxes go up.”
But according to new figures from the nonpartisan Tax Policy Center, that’s not so—by a long shot.
In fact, the income taxes of 70% of Americans will rise. Middle-class workers making between $30,000 and $200,000 will pay up to $1,784 more, a larger percentage increase than for those earning between $200,000 and $500,000.
Tax Policy Center co-director William G. Gale explains:
Under the agreement, taxes will go up in 2013
relative to 2012 - not only on high-income households, as widely discussed, but
also on every working man and woman in the country, via the end of the payroll
tax cut. For most households, the payroll tax takes a far bigger bite than the
income tax does.
Throughout the 2008 and 2012 presidential campaigns, Mr. Obama promised to cut taxes for middle class voters. But the Tax Policy Center says the average American’s tax bill, regardless of income, will climb $1,257.
The President says he has more tax hikes in store beyond the fiscal cliff bill’s rate raises. Just prior to the passage of the fiscal cliff bill, Mr. Obama promised he would raise taxes on upper income earners again at a later date: “The deal we are about to strike will raise taxes on the rich. But, the fiscal imbalances we face remain unsatisfactorily large. So, I will ask for more tax increases on the rich later.”
According to Rep. Tom Price (R-GA), Obama’s fiscal cliff rate hike on the rich will cover just eight days of federal spending.