Posted on 12/27/2012 6:36:57 AM PST by reaganaut1
But failure to reach a deal by year-end would also bring about deeper and more immediate pain for low- and middle-income Americans.
No deal means the end of federal unemployment benefits, averaging $290 a week. Some two million people would be cut off immediately, and nearly one million more who would be cut off in the first quarter of 2013. It means the end of the 2 percent payroll tax cut, which, for the past two years, has reduced taxes for 125 million households, boosting pay by nearly $1,000 a year for the typical household making $50,000.
It also means the end of improvements in tax credits for low-income working families, as well as a credit for low- and middle-income families with college costs, enacted in 2009. If the credits are pared, some 25 million Americans would lose an average of about $1,000 a year in benefits in 2013, and roughly eight million children would either fall into poverty or sink deeper into poverty. The child tax credit for a single mother working full time at the minimum wage, for instance, would be cut from $1,725 to $165. That would be a huge and shameful step backward.
Failure to resolve the fiscal cliff would also force 28 million Americans, most of them making between $100,000 and $500,000 a year, to pay the alternative minimum tax when they file their 2012 tax returns next year. Their situation is obviously not comparable to that of the working poor, but it is also unfair. The alternative tax was supposed to apply to multimillionaires whose tax breaks reduce their tax liability below a level that is considered a minimum fair share. But, for more than a decade, it has not operated that way.
(Excerpt) Read more at nytimes.com ...
Be careful of your sources. This is the NYT after all. They give you enough of the facts that they want you to focus on, and hold back, or falsify the rest. They are the propaganda organ of the Democratic party after all.
I do believe it to be true that our progressive tax system needs to be altered so that everyone pays. That said, I’d dump what we have and institute a flat percentage on incomes, treating dividends, capital gains and wages the same. No deductions at all. Pay from the first dollar. That way, fewer freeloaders, who think they can get something for nothing from the gummint.
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Implement incremental austerity now, or full-out AUSTERITY later. Pick one.
If I want to file my taxes on Jan 4 2013, could I do so? Does the government understand what my rate will be? My deductions? If I go and file, can the IRS change the rules on me later on and demand additional payment, even if I do everything "correctly" the first time?
What are the odds that this is 100% Kabuki Theater and that the IRS knows precisely what the situation will be for tax filers, and has known the final endgame for months?
I believe Obama also wants to go over the cliff.
He gets tax increases which he gets to blame on republicans.
He gets spending cuts which he gets to blame on republicans so that he will take zero heat.
If the middle class is going to vote for European Level spending, they better get used to European Level taxation. The fact that the taxes will fall hardest on Blue States, with the expiration of the ATM patch, is a particular bonus. These people should have to support the spending of the President they chose to re-elect.
Exactly. What heat has he taken for the $6 + trillion increase of the national debt in the last four years? Oh yeah, he got re-elected.
Jump already. Democrats don’t give a shit. Jump, raise taxes to 15% on people making min. wage. Jump Obama. You da Man.
We won’t get any of that.
People will get their January paychecks and freak out.
Obama will immediately propose reinstating the old rates for the 98%. The media will kick into hyperdrive blaming the whole mess on Eeeeeeeevil Republicans. Then they will cave.
As a brain-addled Liberal once observed, you don’t need a Weatherman to know which way the wind blows.
I actually am rooting for us to go over the fiscal cliff, even though I will pay significantly more in taxes. Why? Because too many Americans apparently believe the fiction that they can have whatever government spending they want for “free”, with someone else paying the costs.
Maybe if these people come face to face with the costs of what they voted for, they will realize that we are spending way too much. It’s like a customer at a restaurant. If they have to pay the bill, they are going to be much more restrained when ordering from the menu. If someone else is footing the bill, these deadbeats’ tastes get far more expensive.
Give the people what they voted for.
And the GOPe managed to flip exactly two states: Indiana and North Carolina. And with the absolutely ideal media approved "moderate" candidate with no skeletons in his closet and generous and decent in his personal life.
If we can't make BO own the last four years, what makes the GOPe think they can make him own middle class tax increases? Stupid Sheeple.
Until the credibility of the enemedia is totally destroyed, we will have no more fair and free national elections in this country. Only in some of the better run deeply conservative states.
They flipped two ‘cause I didn’t hear the GOPe tearing into the One. It was another go-along-to-get-along/reach-across-the-aisle/my-esteemed-friend bullshit that went one before W started all the ‘compassionate conservative’ tripe.
You win races like you do wars...DESTROY the opposition. No wonder the Dems won.
We now have the blowhards of the party telling me(us) we gotta be more ‘inclusive’, back amnesty, etc. Wow, way to difference yourself from the opposition.
For the left, what “pain” is there here? All the taxes revert back to the same taxes that were imposed by their hero Bill Clinton. He’s the one who set the tax rates high for low and middle income earners.
Fix the AMT, and everything will be the same as it was in the wonderful 90s. Who can complain about that? .....
Yes. The tax law changes from the fiscal cliff are for the 2013 tax year. You would be paying taxes for the 2012 tax year, and those laws are already settled.
The changes you would see for 2013 would start with your first paycheck. The tax witholding would be higher in expectation of you paying higher taxes, and you would have the full 6.2% taken out in FICA (Social Security) taxes, rather than the 4.2% from the prior two years.
Neither of these two items will have a major impact, because people don't spend extra money they get in tiny quantities, and they don't generally miss tiny quantities either. Also, the feds could simply decide NOT to change the witholding, in expectation that a deal will be reached at some point and will be retroactive.
In reality, I would fully expect that on both the two big bills that need to be fixed (the reversion of the tax code to 2001 levels, and the sequestration from the debt limit bill) will be fixed retroactively, so whatever the fix is, it will end up apply for the whole year.
For that reason, the pressure to fix things before January 1st is really minimal. Obama has already announced that he will NOT be changing any spending patterns in the first couple of months of the new year (despite the loss of spending authority -- which means he'll have to make bigger cuts later if they don't change the law), and the tax changes just hit poeple a little each week, and only if the administration doesn't play with the withholding.
In some ways, January 1st is a fake deadline.
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