A tax hike that’s no small change
In assessing the economic impact of the New Year’s Eve tax deal, both the White House and columnist Ruth Marcus [“The no-big-deal deal,” op-ed, Jan. 3] omitted the deal’s increase in Social Security taxes. The White House’s Jan. 1 Fact Sheet declared that the tax deal is “A Victory for Middle-Class Families and the Economy . . . The final agreement prevents taxes from rising on the middle class.” Ms. Marcus made a similar claim, saying that the agreement avoided inflicting “immediate pain . . . . The middle class — indeed nearly all Americans — will not see income taxes rise.”
But both she and the White House ignore the 2-percentage-point increase in the Social Security tax (on annual wages up to about $110,000) that will be paid by working Americans. The increase will yield about $125 billion this year, dwarfing the roughly $25 billion in additional income taxes that the Office of Management and Budget estimates the wealthiest 2 percent (individuals earning more than $250,00 a year and married couples earning more than $300,000 a year) will pay in 2013.
Is this 5-to-1 ratio what the president and the bipartisan majorities in Congress mean by “shared sacrifice” to solve the government’s debt problem?
Benjamin Cohen, Bethesda