Free Republic

The sky is not falling. That's according to Steven Kyle, an expert in macroeconomics and government policy, and a professor of management at Cornell University's Dyson School of Applied Economics, who offered his comments on the potential economic implications of Congress and President Barack Obama failing to come to an agreement ahead of the Jan. 1, 2013 "Fiscal Cliff" deadline. “The fiscal cliff isn't an emergency that requires most people to take immediate action," he said. "Actually, it is more of a slope than a cliff. The "Fiscal Cliff" refers to the effect of laws that, if unchanged, could result...

The looming Taxmageddon could affect how taxpayers look at their taxes. In a post by Roberton Williams of the Tax Policy Center, Williams presents the increasing importance of marginal tax rates (MRTs) relative to average tax rates. Williams states that “MTRs matter more than usual this year because of the impending [Taxmageddon].” Taxmageddon contains numerous tax hikes scheduled to increase MTRs, including increases on earned and investment income. In addition to the Taxmageddon tax hikes, the Obamacare law will also raise taxes on investment income. The effects of Taxmageddon and Obamacare will be devastating to taxpayers as the top MTR...

The National Association for Business Economics (NABE) recently surveyed 236 business economists on fiscal policy issues, including the looming Taxmageddon and Obamacare. The results of the survey reflect a clear divide on taxes between economists and Democrats in Congress. According to the survey, a majority of respondents support the extension of “payroll tax cuts, current marginal income tax rates, and current tax rates for dividends and capital gains for most or all taxpayers through 2013.” Furthermore, between 35 and 45 percent favor the permanent extension of income, dividends, and capital gains at their current rate. On the issue of tax...

There has been numerous headwinds to a housing (and commercial real estate) recovery. One is doggedly slow economic growth. Another is doggedly high unemployment rates. But there is another headwind that is not talked about for housing and real estate in general: taxmageddon or the upcoming single largest tax increase in American history. Simply put, housing consumption will be reduced in Federal taxes increase. But this is occurring just as housing is beginning to stabilize in many parts of the country. Americans for Tax Reform provide a nice summary of the tax tsunami that is about to hit (unless Congress...

100 Days Until Taxmageddon Sunday will mark the start of the 100-day countdown to “Taxmageddon” – the date the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2013: First Wave: Expiration of 2001 and 2003 Tax Relief In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and Democrat Congress in 2010). The following tax hikes will occur on January 1, 2013: Personal income tax rates will rise on January...

At the Federal Reserve’s last conference meeting in Jackson Hole, Wyoming, Federal Reserve Chairman Ben Bernanke gave the Fed’s outlook for the U.S. economy. Taxmageddon was one of Bernanke’s biggest concerns, as he warned of a “massive fiscal cliff.” Bernanke suggested that Congress “figure out ways to achieve the same long-run fiscal improvement without having it all happen at one date.” Bernanke’s statements echoed the CBO’s latest report on the economy that also warned of a “massive fiscal cliff”, one that would undoubtedly lead to a recession in 2013. Bernanke has made it clear in his past warnings to Congress...

The Congressional Budget Office released a report that gave a grim outlook for the U.S. economy. The CBO predicts a 0.5% decline in real GDP between the fourth quarter of 2012 and 2013 if the Bush Tax Cuts are allowed to expire and scheduled spending cuts are made. The CBO also predicts unemployment to rise to 9% for the second half of 2013 under the same scenario. Although these circumstances could prove hazardous for the U.S. economy in 2013, the outlook for the deficit, according to the CBO, would improve significantly. If tax increases are made, the deficit would be...

Yesterday, the Senate narrowly voted (51-48) to raise taxes on 1.2 million small businesses, which will likely kill more than 700,000 jobs at a time when nearly 13 million Americans are out of work. Senators Joe Lieberman (I-CT) and Jim Webb (D-VA) joined all Republicans in bipartisan opposition to the tax hike. This is President Obama’s economic plan. This is what he asked Congress to do. And he recently told a fundraising crowd that his economic plan has been working. “Just like we’ve tried [Republicans'] plan, we tried our plan—and it worked,” he said. But Obama’s Treasury Secretary, Timothy Geithner,...

Did you know that public uncertainty about federal economic policy is at a 30-year high? Economists at Stanford University and the University of Chicago have actually discovered a way of measuring how uncertain people are. They find that their measure of uncertainty correlates with such economic activities as deciding to invest, deciding how much to produce and deciding whether to hire more workers. One source of uncertainty is what will happen next January when American taxpayers will be hit with a large tax increase (mainly the expiration of the Bush tax cuts) and a major decrease in government spending (the...

By allowing the 2003 Bush tax cuts to retire, taxes will be increasing the bottom rate from 10% to 15% and the 20% bracket to 25%.   is this math correct? :    Raising the 10% bracket to 15% represents what percentage of increase? (Hint: The correct answer is NOT 5%)To those moving from the 10% bracket to 15%, their taxes will be increased by 50%!!   Raising the 20% bracket to 25% represents what percentage of increase? (Hint: The correct answer, again, is NOT 5%)it's s a full-blown 25% increase in taxes   Finally, raising the 35% bracket to...

Tax hikes and spending cuts set to take effect in January would suck $607 billion out of the economy next year, plunging the nation at least briefly back into recession, the nonpartisan Congressional Budget Office said Tuesday. Unless lawmakers act, the economy is likely to contract in the first half of 2013 at an annualized rate of 1.3 percent, the CBO said, before returning to 2.3 percent growth later in the year. Canceling those tax and spending policies would protect the recovery in the short run and encourage more vibrant growth, around 4.4 percent, in 2013, the CBO said. However,...

Brace yourself. In a mere 271 days, you and your fellow Americans will be hit with a tax hike the likes of which this country has never seen. The Washington Post aptly called the unprecedented $494 billion tax hike “Taxmageddon,” and Federal Reserve Chairman Ben Bernanke described it as a “massive fiscal cliff.” Whatever your preferred imagery, it’s a really big deal. Despite all the warnings, President Barack Obama has kept his silence while Congress has made no apparent effort to prevent this impending calamity to families and the economy. The prevailing wisdom is that “something will get done” in...