News Release

* Middle Class Taxes Going Up * How Billions Could Be Raised

DEAN BAKER, NICOLE WOO, ALAN BARBER [email], @ceprdc
Baker is co-director of the Center for Economic and Policy Research. He is available for a limited number of interviews. Woo and Barber are director of domestic policy and communications director for CEPR. Woo noted that under the deal, an individual making less than $113,700 (the bottom 98 percent) would see their taxes rise by 2.0 percent, while an individual making $400,000 will see their taxes rise by 0.6 percent. Someone making $600,000 would have their taxes increase 1.9 percent. [See chart.] Baker just wrote the piece “Obama’s tax threshold concession bodes ill for debt ceiling talks

MAYA ROCKEYMOORE, [email] , @MayaRockeymoore
Rockeymoore is president of Global Policy Solutions. She said today: “Thus far, the national deficit reduction debate has largely accepted right-wing assumptions that have prioritized the extension of Bush-era tax cuts for most Americans over protecting and strengthening Social Security and Medicare, pillars of American progress that are and will continue to be vital to the well-being of millions. Unfortunately, the fiscal cliff deal negotiated by the White House and passed by Congress, with significant help from Democrats, emboldens those who will demand reductions to these programs as a way to offset the cost of the tax cuts. They will make these demands even though Social Security has not contributed a penny to the deficit and even though there are other, more legitimate ways to reduce the debt.

“Given what’s at stake, the question remains why the White House would negotiate and Democrats vote for a deal that imperils programs that are vital to their base and essential to their party’s legacy?

“If we want to have a serious discussion, there are a number of ways to raise more revenue for deficit reduction than going after Social Security or Medicare: Taxing capital gains and dividends as ordinary income: $880 billion; limiting deductibility of corporate interest: $837 billion; having a surcharge on millionaires: $460 billion; having a Wall Street trading and speculators tax: $352 billion.” [Source: Economic Policy Institute.]

See also, Jeffrey Sachs, director, Earth Institute at Columbia University; Reject the Deal: “The White House and Senate have agreed to make the Bush tax cuts permanent for 99 percent of households, starving the federal government of funds. Even Mitt Romney could never have accomplished for the Republicans what Obama has just done for them. The Democrats in the Senate would have soundly rejected the plan if the Republicans had put it forward.”