TODAY Money expert and msnbc.com senior writer John Schoen joined us for a live Web chat Wednesday afternoon about the proposed tax deal between the GOP and President Barack Obama that's winding its way through Congress.
Here are two of his answers and a complete archive.
Question from Tdavis1544: What is the effect of the payroll tax 2 percent savings on working-class citizens?
John Schoen: It’s pretty simple: you get what amounts to a 2 percent raise – up to the max of $107,000. What you lose is something called the Make Work Pay tax credit of $400 ($800 for couples) that phased out at $95,000 ($190,000 for couples). So the more you make the more you save in taxes.
Question from Patrick: John, We hear a lot about the huge deficit in federal spending, but little about what we're buying this year that we didn't in prior year's. What are we buying with all that loot?
John Schoen: Most of what we’re “buying” is a social safety net – Social Security and Medicare – that returns more than it takes in. That’s pretty much true of all government spending: we all want to keep our benefits and programs and services – but we don’t want to pay for it. Here’s how far off track we are: If you set aside Social Security, Medicare and the defense budget, there’s something less than 20 cents left over to pay for all other parts of the federal government. Unless we get these programs under control – Mediare is the biggest untamed monster – there’s not a lot you can do to balance the budget. Earmarks – for example – make up a tiny fraction of overall spending.
Complete archive:
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