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Fiscal Abyss Bill Passes Senate Barely Touches the Trillion Dollar Deficit
Confounded Interest ^ | 1/1/2013 | Anthony B. Sanders

Posted on 01/01/2013 9:52:23 AM PST by whitedog57

The US Senate passed a bill last night to avoid the fiscal abyss. Actually, it just bypasses it and does nothing about putting our disastrous fiscal house in order.

Here is the actual bill in all its gory details: 118551686-Mat-12564

The Senate bill raises income tax rates for those taxpayers with incomes more than $400,000 for individuals and $450,000 for couples from 35 percent to 39.6 percent. These higher income taxpayers will also pay higher rates on investment income, with rates on dividends and capital gains rising from 15 percent to 20 percent. Add the 3.8 percent Obamacare surcharge on investment income — another tax that takes effect in January, and the top rate on investment income would rise to 23.8 percent for those high-income households.

The bill also raises taxes on couples earning more than $250,000 a year and single persons earning more than $200,000 by limiting personal exemptions and itemized deductions.

Estates taxes will also be increased, with the top rate raised to 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates.

This bill has been scored as a $620 billion tax increase.

Bear in mind that the $620 billion in tax increases is spread over 10 years, so it is only $62 billion in 2013. To put this in perspective, the Federal budget deficit in 2011 was a whopping $1.089 trillion. This amounts to only 5.7% of the 2011 budget deficit! You can barely see $62 billion on the following Federal budget chart.

As I have discussed before, there simply isn’t enough income tax revenues available (particularly from the $250,000 and above crowd of 1.92% of the population to satisfy the Federal government’s ravenous appetite.

And government spending continues to skyrocket to infinity … and beyond! According to the Congressional Budget Office, the Senate bill cuts only $15 billion in spending. This results in a 41:1 ratio of tax increases to spending cuts.

It is now the House of Representatives that takes a swipe at avoiding the fiscal abyss. It is a spending problem, so sequestration may be the appropriate solution to reign in manic government spending. On the other hand, the over 50% cuts in defense spending compared to other runaway spending seems pretty drastic.

I have my doubts as to whether there is any will left in Washington DC to cut spending. Happy New Year!

TOPICS: Business/Economy; Government; Politics
KEYWORDS: 112th; boehner; fiscalcliff; mcconnell; obama; reid
I just woke up in wonderful NoCal after a fun night. This economist had already posted a Senate bill update, so I apologize if this is a repeat. I don't know how to post his charts, but they are are always informative. Cheers!
1 posted on 01/01/2013 9:52:30 AM PST by whitedog57
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To: whitedog57
Putting America's Tax Hike In Perspective
2 posted on 01/01/2013 9:57:32 AM PST by TwelveOfTwenty (Ho, ho, hey, hey, I'm BUYcotting Chick-Fil-A)
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To: whitedog57
Be my guest.

3 posted on 01/01/2013 10:04:02 AM PST by spokeshave (The only people better off today than 4 years ago are the Prisoners at Guantanamo.)
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To: spokeshave

The news media came up with this “fiscal cliff” bs . And that’s all we’ve heard about since the election even from the common idiots who have no idea what is the cliff when asked. Call Congress and tell them not to believe the media. What is the stupid cliff?There is no cliff. the country supposedly went over the cliff at midnight. pure media lies. then last night Senators were forced at 2 am on New year’s day to rush vote for a bill they couldn’t have read as the agreement was done by Biden and McConnell yesterday: all this to avoid the MEDIA’s stupid cliff. Now they are pressuring the House to vote rapidly without each congressmen reading it or absorbing what this is which a horrible bill.

The U.S.A is a dictatorship and the media are the dictators.

call GOP Congressmen in the House, tell them not to vote for this nor any deal ,there is no cliff as that “cliff” is media lies to force them to agree to tax increases.

Congress switchboard number: (202) 224-3121

4 posted on 01/01/2013 10:10:19 AM PST by Democrat_media (media makes mass shooters household names to create more & take our guns)
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To: whitedog57

The Hill identified the RINOS we must remove in a major party purge ~ ~ this is nice of them ~ you don’t often get any of the media folks working on our behalf.

5 posted on 01/01/2013 10:11:21 AM PST by muawiyah
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To: whitedog57

Section. 7.
Clause 1: All Bills for raising Revenue shall originate in the House of Representatives;

6 posted on 01/01/2013 10:30:36 AM PST by Bryan24 (When in doubt, move to the right..........)
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To: Bryan24
Section. 7. Clause 1: All Bills for raising Revenue shall originate in the House of Representatives;

LIBS:"You and your damn racist rules. This was written by racist slave-owners over 200 years ago and is not reflecting current situations. Obama should just do whatever he wants by executive order!"

7 posted on 01/01/2013 10:39:38 AM PST by frogjerk (Obama Claus is coming to town!)
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To: frogjerk
Obama should just do whatever he wants by executive order!"

That was the plan from "day 1."

November 10, 2008

The co-chair of Barack Obama's Transition Team, Valerie Jarrett, appeared on Meet the Press this weekend and used, shall we say, an interesting word to described what she thinks Barack Obama will be doing in January when he's officially sworn into office. She told Tom Brokaw that Obama will be ready to "rule" on day one. It's a word that reflects the worst fears that people have for Obama the "arrogant," the "messiah," that imagines he's here to "rule" instead of govern.

Jarret told Brokaw that "given the daunting challenges that we face, it's important that president elect Obama is prepared to really take power and begin to rule day one."


8 posted on 01/01/2013 11:52:03 AM PST by TLI ( ITINERIS IMPENDEO VALHALLA)
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To: whitedog57

It won’t even touch the deficit. The deficit will increase. Entitled, bipartisan fascist regulators win the pile of debt of decreasing value.

9 posted on 01/01/2013 12:21:25 PM PST by familyop (We Baby Boomers are croaking in an avalanche of rotten politics smelled around the planet.)
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