The middle-class tax hikes in Obama's "fiscal cliff" plan

President Obama has said it time and time again: The wealthy should contribute more in taxes while the middle class should be protected in budget and deficit negotiations. However, the president's most recent proposal for averting the so-called "fiscal cliff" includes some proposals that would hit the middle class -- more so than the wealthy -- with tax hikes.

On Monday night, CBS News chief White House correspondent Major Garrett reported the president gave House Speaker John Boehner his latest "fiscal cliff" offer, calling for $1.2 trillion in new tax revenues and $930 billion in spending cuts.

On the tax revenue side, Mr. Obama's latest offer allows the 2 percent payroll tax cut -- first enacted two years ago -- to expire. The deal also includes huge savings from adopting a "chained" consumer price index (chained CPI), changing the way the government measures inflation. Negotiations over the "fiscal cliff" -- the series of tax hikes and spending cuts set to kick in next year -- remain fluid, so both of these proposals could be scrapped or modified. Both of these policies, however, would, in effect, raise taxes on the middle class.

The payroll tax cut

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Middle class households fear expiration of payroll tax cut

The Obama administration enacted the payroll tax cut as a temporary means of boosting economic growth, so letting it expire arguably shouldn't be called a tax "hike." The fact is, however, that if it expires, taxes will be higher. CBS News' Jim Axelrod reported on the strain this will put on middle-class families at a time when the economy is still vulnerable: Households making $50,000 would pay $1,035 a year more in payroll taxes.

Ending the payroll tax holiday, bringing the payroll tax back up to 6.2 percent from 4.2 percent, would hit lower- and middle-income households more significantly -- that's because the payroll tax is only applied to income up to $110,100.

As CBS MoneyWatch editor-at-large Jill Schlesinger reported, the payroll tax holiday put more money in the pockets of 160 million Americans.

Sen. Bob Casey, D-Pa., introduced legislation this month to extend the payroll tax cut, saying, "Protecting the middle class and fueling the economy is something both Republicans and Democrats should support."

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[TICKEDOFFNPSL88]

i TOO WILL LEAD A BORING LIFE BARELY ABLE TO FEED MY SON AND MY SON...I AM ALREADY 100 LBS WHILEMR. OBAMA AND HIS FAMILY HAVE A CHEF AND MAKE A TON OF MONEY HE GETS TO BANK FOR 8 YEARS....GETS TO EAT DINNER WITH HIS FAMILY EVERY NIGHT SAYS MRS. OBAMA!!! MR. PRESIDENT MAYBE YOU SHOULD WORK ON TAX CUTS FOR THE MIDDLE CLASS......YOU ARE KILLING US!!!!!! YOU HAVE LIED TO US AND WE AMERICANS ARE SICK AND TIRED OF BEING SICK AND TIRED...SICK OF HAVING NO MONEY SICK OF NOT AFFORDING VACATIONS, EATING OUT....FOR GOD'S SAKE...WE CAN'T EVEN PAY OUR BILLS...DO YOU HAVE TO WORRY ABOUT YOUR PHONE OR CABLE BILL? FIXING YOUR CAR OR EVEN BUYING ONE? SPENDING MONEY AT THE GROCERY STORE...BUYING SCHOOL CLOTHES....WE AR SORRY YOU ARE THE PRESIDENT...I AM SORRY I VOTED YOU IN THE FIRST TIME

[tb012a]

Well, go ahead raise taxes on the middle class. Then the ball will get rolling even faster, personnel spending cuts will follow at an even faster rate. Good luck America this is what happens when we elect incapable leaders, who only worry about the next election for the sake of there own job. Who's to blame, the American voters?. I personally can not afford to spend another cent on anything. If my taxes go up, I plan to as follows:
1. cancel home cable, internet and phone.
2. No eating out.
3. car ins. minimum only.
4. no more traveling vacations.
5. no more home remodeling.
6. I will scrimp and save on anything I can, and live a boring life. So, at least I will be some what prepared for the economic crisis that will cost me my job. I'M READY

I thank that we need to do away with payroll tax.
I thank that we need to do away with all loop holes, including all internet orders.

I thank that the congressmans should take a 10% cut in pay every year tell we get the budget under control.

Have a flat State sales tax at 10% for all the states.

Have a flat Federal sales tax at 10% for all the states.

[CBSknows]

"COMPROMISE WITH AMERICA'S PRESIDENT, AMERICA'S LEADER, THAT WAS VOTED IN OFFICE TO LEAD AMERICA BY AMERICA"

Mr. Obama Is Not the Democrats President He Is:

"THE PRESIDENT OF THE UNITED STATES" ALL PARTIES SHOULD FOLLOW HIS LEAD.. MR. OBAMA.. IS AMERICA'S LEADER YOUR LEADER/OUR LEADER, HE WAS ELECTED BY AMERICA TO LEAD OUR NATION. "SO LET HIM LEAD" "STAND BY HIM"

"THIS IS WHY "WE THE PEOPLE PUT HIM IN OFFICE" SO FOCUS ON THE BALL ONLY, COMPROMISE WITH THE PRESIDENT AT ALL TIMES & WORK WITH HIM..THIS IS YOUR JOB..YOUR JOB IS NOT TO WORRY ABOUT WHAT YOUR PARTY THINKS ABOUT YOU ! !

" AND IT CERTAINLY IS NOT PRODUCTIVE TO ANY PARTY OR AMERICA TO HURT AMERICA BY NOT WORKING WITH AMERICA'S LEADER THAT "WE THE PEOPLE VOTED FOR TO LEAD OUR COUNTRY"

[Ubeensuckered]

You and the rest of the blind can follow obozo right to the bread lines

[tsigili]

Obama says one thing, and then does another.

When is the country going to wake up to the fact, he is the biggest liar in Washington?

[1Gandydancer]

"#socialsecurity has nothing to do with the deficit -- why are we even talking about it?," wrote Rep. Hank Johnson, D-Ga."

cbsnews prints this without comment. But FICA taxes no longer cover Social Security payments.

[johnlockesghost]

To be honest, which is beyond the scope of most politicians, the "chained" CPI" ought to include the skyrocketing cost of insurance.

[nearl451]

Why all the whining?

At the time the payroll taxes were relaxed it was widely recognized to be a temporary stimulative effect that WAS NOT SUSTAINABLE as it exasperated the future funding of Medicare and SS.

Conservative, Liberal or whatever political ilk, the math doesn't work to further defund something you are trying to sustain for the long term.

As liberal as I am, I recognized that this was a bad move from the beginning and only had negative political connotations once the breaks expired. But expire they must. THe math doesn't work out otherwise.

Same for the Bush era tax cuts. They were passed as temporary and stimulative after 9-11, but were never sustainable.....especially with 2 hot wars going on. Sure Grover expected the defundingto lead to spending cuts, but when those did not follow we had over a decade of debt tocrawl out of. In fact, the truth is that there are 30 years of poor fiscal management and debt to crawl out of.

Ever pay off a 30 year mortgage. Well this is analogous. You can even calculate how much youmust cut budget by and raise revenue by WITH INTEREST to pay it off in 30 years. Can't reduce it to 10 years or the economy will tank.

First you have to at least break even a year or two.

[FormerDemocratNowSane]

I am amazed of what people perceive as "fair." Why are "rich" people demonized? They or their ancestors might actually have worked from the ground up and started a successful business that employed people. Those individuals buy items (the manufacture and sale of which generates jobs), hire people to work in their companies (those are paid for through what appears to be considered evil by some: profits), donate large sums to charity, give endowments to colleges, and provide scholarships to needy students.

What constitutes paying a "fair share?" In my book, everyone should pay their fair share in equal percentages. The approximate 49% that pay NO income tax should pay their fair share. If they want to increase their income perhaps they should cut down on the number of children, delay getting married, get work wherever they can to improve their resume, and continue their education.

Don't smoke (costly in both money and health), don't drink (costly in both money and health), and don't do drugs (costly in both money and health). If someone chooses to spend money on non-benefit generating items and forego an education because they subsequently cannot afford one, they should not nor do they have the right to demand more aid. If someone chose to be a slacker in high school, that was their choice. One individual's poor choices in life should not become the taxpayers' burden.

Many people have worked a variety of minimum wage jobs: cleaning restrooms, working retail, waiting tables - with virtually all the money going to their education. If someone is not willing to get their hands dirty or willing to forego some "luxuries" to pay for an education, then I have no sympathy for them.

I worked a temporary job at a store where one cashier was ecstatic that she was pregnant again, not because she wanted to have another child because she loved children, but because she and her husband wanted to get more welfare. She had no desire to get an education. Those types of people are the parasites that destroy the value social programs and increase costs. Social programs should be only temporary; however, some politicians apparently want to keep many people dependent on the government at the taxpayers' expense.

[EyeBallLick]

Nice BS story, or as we on the internet like to say, " cool story bro"

[idiotcontrol]

The 49% that don't pay taxes do actually pay taxes. They pay the payroll tax, the ss tax, the medicare tax. Before idiots like yourself start spewing **** stories you ought to know the facts.

[taylorsucram]

I DON'T GET ANY OF THIS?

LOOK, you were paying these (about to be instituted come January 1st) tax rates anyway back when Clinton was President. We were balancing the "Budget" ... we had a surplus. Let the Republicans kill the "Middle-Class Tax Cut" already passed by the Senate and awaiting the "House" to say yea or nay.

That will be all she wrote for them come 2014. President Obama will make the Republicans PASS THE SENATE MIDDLE-CLASS TAX CUT BILL IN JANUARY 2013.

There is simple nothing the Republicans can do ... well, they can pray that those "Defense Cuts" don't happen in their "districts".