Skip to comments.The Most Important Question In Washington: Is A Massive Tax Hike Just A Few Weeks Away? (Spin)
Posted on 11/11/2011 9:21:38 AM PST by Qbert
There's been a lot of discussion about the deficit super-committee lately, and whether the bi-partisan panel can come up with a package, or whether it's doomed for gridlock.
But whatever they decide to do, the near-term impact on the economy will be pretty minimal. The automatic trigger cuts don't kick in until 2013, and they can be watered down.
But there is one decision that has to be made in a few weeks that absolutely would have an impact, and that's whether the payroll tax cuts that were agreed to late in 2010 will be extended again. Morgan Stanley explains the economic stakes:
The first relates to extension of the emergency stimulus measures of 2011.
However, these stimulus measures could be continued through inclusion in a Super Committee deal or an end-of-the-year appropriations bill, commonly known as an extender bill.
As for the politics of it, Sam Stein at Huffington Post has a good rundown of the President's strategy. Basically, he's going to make this a central part of his strategy, hoping to make it impossible for Congress to leave on holiday without a deal to avoid having people's taxes raised.
"I find it hard to believe that these members of Congress are going to go to National Airport on December 23 and go home, and basically tell their constituents your taxes are going up $1,000 next year and we didn't do anything to help the economy," said one administration official.
The president and his staff have made little secret of their desire to see the super committee tuck the payroll tax cut extension (along with other elements of the president's jobs package) into that proposal. Democratic aides on Capitol Hill have largely agreed.
(Excerpt) Read more at businessinsider.com ...
Silly premise. Anyone have any idea what a massive tax hike would have on our teetering economy? I do. An idea, that is. ;-)
Massive TEA Party resurgence.
Republican or democrat, both parties know that to sustain future outlays of medicare, SS and medicaid, taxes will have to go up.
I’ve heard estimates over a dozen years or so to the tune of 60 Trill.
—Republican or democrat, both parties know that to sustain future outlays of medicare, SS and medicaid, taxes will have to go up.—
Yeah, That’s like saying, after dad has been laid off a year, that to keep the house, the motorhome and the car, dad’s gonna have to increase his income.
We’re stuck. You need an economy for our system to survive, and if you raise taxes you suck the air right out of the economy.
That is why I think we are headed toward the worst socioeconomic collapse in the history of civilization. And soon. I’m really not kidding in my tag line. There is no remotely pleasant way out of this.
Sorry....my hopes in an alternate universe, I suppose.
It appears that spending must be cut (a lot) and tax revenue must go up. How can that happen when demand for everything goes down? It could get ugly...
The sad thing is that Democrats will/would tag this as Republicans raising taxes on the poor and middle class (9-9-9 was attacked by Republican candidates along the same theme), and Republicans dont have the guts to get on TV and say that FICA is a Social Security tax, intended to fund SS (ie 'entitlement' DUHH).
They let live the liberal lie that a 'social security surplus trust fund' is funding those borrowed payments, as if congresses and POTUSes would think of saving a dime for a future congresses and POTUSes .
All you have to say is the truth: the Dems want to gut Social Security.
Let me see if I got this straight..... several months ago the legislation to extend the debt limit, and also created this so called super committee, was the best deal they could get. These same people knew this was about to expire, and they knew the so called super committee would have to put it into a package, or it would mean an automatic tax increase. The dems wanted a tax increase all along. Now, if spending is not increased, the dems walk out of the supercommittee, and blame the republicans for the tax increase... Either way, the republicans got snookered (again, surprize surprize) the dems get their tax increase, the dems got their debt ceiling raised, and we, the taxpayers, pay the price for incompetent republican leadership, or lack therof.... we have been screwed, and the beltway people will go out to dinner ( on the taxpayers dime ) then get chauffered home ( on the taxpayers dime )then crawl into their nice beds in their nice homes ( paid for on the taxpayers dime ) then get up, to go work, and sit in a newly remodeled office, usually remodeled to the tune of 20 to 40 thousand dollars ( taxpayers once again )........... now, would somebody tell me why republicans are any different then the lib commie dems????
What is perfect about your suggestion is it is short and sweet. In fact my lurking visits to DU show that many of them are worried that Obama cutting FICA will in fact kill SS, so you get to divide them for a change.
How about a math exercise here?
Say there are 100 million people working in this country.
Say they are only making $10 an hour. ( I realize many are making more).
Say they work 40 hours a week or get paid for 40 hours a week.
That is 2040 hours a year.
At $10 an hour, that is $20,400.00 annually in gross pay.
Times 100 million is a national gross of $2,040,000,000,000.00 or 2 Trillion, 40 Billion gross dollars in payroll.
Using the flucuating 2% of Social Security payments from that payroll gross, that ==$40,800,000,000.00 or $40 billion, 800 million a year which will NOT get put into the Social Security fund.
That much money & much more has already NOT gone into the SS fund & many sources are telling us that SS is overdrawn as I type this.
Continuing this madness will only push this country over the edge all the sooner.
Keep in mind that I used only $10 an hour for wages. The Hollywood elites probably would supply this gross payroll on their own.
We’ve already witnessed the largest transfer of wealth in world history from America to China.
—Weve already witnessed the largest transfer of wealth in world history from America to China.—
And the only real way out is to monetize our debt. And that sows the seeds of a very bad ending.
I maintain there simply is no money in a SS trust fund. That was ended long ago. The entity may exist as a name only at this point. When either side talks about this fund as existing and that on paper at least it has some 2.4 Trillion dollars in the account, they are deceiving people.
When Reagan raised FICA taxes to create a SS surplus (contrary to how Newt claims it happened) that money was spend immediately by the government, leaving a worthless IOU to itself. It is about as real as the deficit reduction compromise trigger.
It is amazing that people STILL take those in DC seriously, thanks to the media.
That is what I had in mind.
But there is one decision that has to be made in a few weeks that absolutely would have an impact, and that's whether the payroll tax cuts that were agreed to late in 2010 will be extended again.
(oops) Thanks sickoflibs.
It amazes me that the GOP is taking a stand for higher taxes.
I will be very angry if I have to come up with an extra $80-100 a month in my budget when no raise is coming and the budget’s already tight.
They better accept the holiday even if Obama gets credit. It does not look good to be for a tax hike.
The fact that many on FR are opposed to the tax holiday when they would have been for it under Bush just shows how much ideology can blind, but look....I really don’t care who proposed it. We need it again or the economy will get even worse. It probably well even with it, but let’s at least keep it from getting as bad as it can get.
"The fact that many on FR are opposed to the tax holiday when they would have been for it under Bush just shows how much ideology can blind, but look....I really dont care who proposed it. We need it again or the economy will get even worse. It probably well even with it, but lets at least keep it from getting as bad as it can get."
It has nothing to do with what party suggests it: They've already done this numerous times before... has it improved the economy one bit?
Don’t know, but I know we would be hurting even more without it. Have to cut the budget even more.
"Have to cut the budget even more."
How can you "cut the budget" when the payroll-tax cut leaves social security funding in an even worse position?