And the chained CPI is also a back-door tax increase on the working poor! Via Digby:
Most of you know that the Chained-CPI is a cut in Social Security, disability and retirement benefits. But how about this?
Yeah, it’s a backdoor tax increase that falls disproportionately on those making between 20 and 50 thousand dollars a year:
The group getting the biggest tax hike is families making between $30,000 and $40,000 a year. Their increase is almost six times that faced by millionaires. That’s because millionaires are already in the top bracket, so they’re not being pushed into higher marginal rates because of changing bracket thresholds. While a different inflation measure might mean that the cutoff between the 15 percent and 25 percent goes from $35,000 to $30,000, the threshold for the top 35 percent bracket is already low enough that all millionaires are paying it. Some of their income is taxed at higher rates because of lower thresholds down the line, but as a percentage of income that doesn’t amount to a whole lot.
All told, chained CPI raises average taxes by about 0.19 percent of income. So, taken all together, it’s basically a big (5 percent over 12 years; more, if you take a longer view) across-the-board cut in Social Security benefits paired with a 0.19 percent income surtax. You don’t hear a lot of politicians calling for the drastic slashing of Social Security benefits and an across-the-board tax increase that disproportionately hits low earners. But that’s what they’re sneakily doing when they talk about chained CPI
Oh, and let’s not forget. That tax hike, by law, goes to pay for George W. Bush’s wars not to shore up Social Security. And since these benefits cuts only add a very small amount to the Social Security trust fund, we’ll be back with another campaign to cut more within a couple of years.
You need to call, even if your rep is a Republican. Please call again today:
And Peter Orszag to the rescue of Obama and his beloved Chained CPI — in an article in Bloomberg, Peter carefully muddies the waters by saying, well, maybe the CPI doesn’t always come out very much lower than the one currently used. Ain’t that great? Instead, just recently (how long did it last, Peter), the C-CPI was much closer to the regular CPI, and it might end up being only 2% less over 20 years.
Consider me just as pissed as before, Peter. You Neoliberal Corporatist running dog lackey.
BTW, a cut of a few dollars to someone with about $12-14,000 a year makes a real difference, you cold hearted, mean spirited, tight fisted for the poor Corporatist running dog lackey.
Read the rest of Obama’s budget, even as his chained CPI hypothecates the fungibility of canned tuna and cat food for Seniors as relevant to living standards, Obama is proposing to raise Medicare co-pays for which there is no alternate purchase. Obama is burning the senior candle off both ends.
It’s not only seniors who will be burned at both ends by chained-CPI the military and federal employees will be lit on fire as well. The same cost-of-living formula used for Social Security is used for the military and for federal employees. You just knew that Jacob Lew was going to once again work his economic magic and screw the 99% just like he did when he worked for Reagan. All things old are new again. Especially when it comes to austerity measures and taking from the poor to give to the rich.
The great con job of the tax cut extension was focusing attention on the extension of cuts for the gap between $250k and $400K. Completely unmentioned was the relatively enormous FICA tax increase dumped on the lower income people by the FICA tax holiday being allowed to expire.
This con is focusing on some high income tax deductions while the chained CPI is increasing taxes all the way down by slowing down the upper movement of tax brackets.
Classic misdirection to cheat the rubes. Who are the people with the above $250K incomes? The Washington and New York news media people and the professional lobbyists and political operatives. Keep your eye on the pea.