Will Congress go over the Fiscal Cliff?

[Spot72]

I keep telling you. Obama wants this to happen. He will blame the Republicans in the hopes of riding America of a two party system. IT is so obvious. The Republicans will go for increased taxes on the wealthy if Obama would promise meaningful spending cuts. But he won't, he'll do just enough so he won't be blamed and then throw Boener under the bus from his bully pulpit.

I am amazed that the Obama voter voted for increased taxes on themselves. Just for starters they will have to pay $183 a month in taxes. How many of these people can afford that?

Screwballs.

Sage, You have to see the forest for the trees.

[Struds]

I keep telling you. Obama wants this to happen. He will blame the Republicans in the hopes of riding America of a two party system. IT is so obvious. The Republicans will go for increased taxes on the wealthy if Obama would promise meaningful spending cuts. But he won't, he'll do just enough so he won't be blamed and then throw Boener under the bus from his bully pulpit.
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Sadly, I am less and less able to believe this. The President offered to raise his long-held earnings number of $250K to $400K, and some in the GOP countered with $1 million. Boehner could not even gain support for that high number.

What I would have liked to see the GOP do was agree to the $400K (with annual increases built in) AND insist that specified spending cuts be included in the agreement/bill.

But, instead of making a counter offer, they simply let Boehner know any tax increase wouldn't be supported. I am seriously thinking of changing my party affiliation.

I think both sides are posturing and looking to blame each other at our expense. They've forgotten that their main role is to serve all of us, not just the loudest voices in their parties.

[jessup270]

Many people who make more than $400,000 per year, have tax dodges that blue collar workers don't.

Most middle class workers get their w2s, take the standard deductions and thats about it.

My "guess" is that people making over $400,000 have accountants/CPAs and so forth that make sure they use every tax dodge possible.

Many small business people at one time were buying Hummers and writing them off as tax deductions.

Working class people making 50K and using the standard the deduction pay a true higher percentage of income taxes than most small business people.

[soulflower]

Many people who make more than $400,000 per year, have tax dodges that blue collar workers don't.

Most middle class workers get their w2s, take the standard deductions and thats about it.

My "guess" is that people making over $400,000 have accountants/CPAs and so forth that make sure they use every tax dodge possible.

Many small business people at one time were buying Hummers and writing them off as tax deductions.

Working class people making 50K and using the standard the deduction pay a true higher percentage of income taxes than most small business people.

This is true. Very few 'true' Small Business owners are clearing 250k on their tax returns after write offs and deductions.

Any business owner who has that much profit after deductions can afford a small tax increase.

There's quite a bit of confusion in Washington over what defines a "Small Business"

[Phoenix]

Congress already went over the fiscal cliff.

The people who voted themselves government freebies this past November will get stucketh with both higher taxes and inflation.

And won't that be sweet?

[Struds]

Another definition that causes confusion in D.C. is the term "rich". $250K may very well be rich in - say - Anniston, Alabama. But is sure as hell isn't rich in SF or NYC.

Anyway, the government could tax the "rich" at 100% and it still wouldn't solve the deficit problem. So no matter how much we think others can afford, without spending cuts we've accomplished nothing. Any proposal for one without the other is useless.

By the way, Romney proposed closing the loopholes mentioned a couple of posts up as part of his plan to reduce the deficit. That idea could still be included in any compromise plan the two parties might throw out there. Of course, that assumes they are actually interested in compromise, and that doesn't seem to be the case.

[soulflower]

Another definition that causes confusion in D.C. is the term "rich". $250K may very well be rich in - say - Anniston, Alabama. But is sure as hell isn't rich in SF or NYC.

Anyway, the government could tax the "rich" at 100% and it still wouldn't solve the deficit problem. So no matter how much we think others can afford, without spending cuts we've accomplished nothing. Any proposal for one without the other is useless.

By the way, Romney proposed closing the loopholes mentioned a couple of posts up as part of his plan to reduce the deficit. That idea could still be included in any compromise plan the two parties might throw out there. Of course, that assumes they are actually interested in compromise, and that doesn't seem to be the case.

250k certainly isn't rich for wage earners and it should be emphasized that all income below 250k wouldn't get a tax increase under the Democrat plan. It's only on income you earn after you reach 250k that you would see a tax increase. So if you earn 260k next year, you would only see your taxes go up on your final 10k of income.

I'm not sure about closing loopholes. I doubt we'd ever close any of the major loopholes in the tax code. However, I can support lowering the caps on certain deductions.

[flyboy56]

I keep hearing the politico pundits refer to the phrase "political will." As in our representatives in Washington do not seem to have the political will to make the tough decisions. What exactly does that mean? I have a pretty good idea what it means but I haven't heard any of the pundits explain it.

[RIKMAN]

If I had any faith at all in Washington, I'd think going over the cliff and eventually getting our fiscal house in order would be worth the pain.

However, my gut tells me these jokers alreay have plans to spend the new found revenue while delaying the "cuts".

Until the folks get angry enough, nothing is going to change.

[Struds]

250k certainly isn't rich for wage earners and it should be emphasized that all income below 250k wouldn't get a tax increase under the Democrat plan. It's only on income you earn after you reach 250k that you would see a tax increase. So if you earn 260k next year, you would only see your taxes go up on your final 10k of income.

I'm not sure about closing loopholes. I doubt we'd ever close any of the major loopholes in the tax code. However, I can support lowering the caps on certain deductions.

Yeah, I agree that caps can be used. If SS taxes can be capped, then why can't (for example) the mortgage interest deduction be capped at $50K.

But again, without spending cuts none of this makes more than a dent in the deficit.

[jessup270]

250k certainly isn't rich for wage earners and it should be emphasized that all income below 250k wouldn't get a tax increase under the Democrat plan. It's only on income you earn after you reach 250k that you would see a tax increase. So if you earn 260k next year, you would only see your taxes go up on your final 10k of income.

I'm not sure about closing loopholes. I doubt we'd ever close any of the major loopholes in the tax code. However, I can support lowering the caps on certain deductions.

Why do people think that the wages of $250,000 is not rich for wage earners.

For me the wage of $250,000 is an incredible amount of money.

I was a professional a Fire Fighter for 25 years. I always felt that my wages and benefits were very fair during my career.

When people say that $250,000 is not a lot of money it baffles me. Thats $20,833 a month.

Nobody in my entire family draws $20,833 a month. Lots of college grads in the groups, lots of teachers, lots of supervisors, still no one makes that kind of money.

No one in my development makes that kind of money.

I am not saying people shouldn't be able to earn big bucks, its just that it sounds silly when people say that someone earning $250K is not making a lot of money each year.

[Struds]

Why do people think that the wages of $250,000 is not rich for wage earners.

For me the wage of $250,000 is an incredible amount of money.

I was a professional a Fire Fighter for 25 years. I always felt that my wages and benefits were very fair during my career.

When people say that $250,000 is not a lot of money it baffles me. Thats $20,833 a month.

Nobody in my entire family draws $20,833 a month. Lots of college grads in the groups, lots of teachers, lots of supervisors, still no one makes that kind of money.

No one in my development makes that kind of money.

I am not saying people shouldn't be able to earn big bucks, its just that it sounds silly when people say that someone earning $250K is not making a lot of money each year.

Location makes a huge difference.

http://www.huffingtonpost.com/2012/0...eNevada_County

"In New York, the minimum wage is $7.25, far below the $11.86 an hour it takes to actually live in the city, according to the Living Wage Project. And it takes six figures to effectively belong in the city's middle class. A 2009 study from the Center for an Urban Future found that someone making $60,000 and living in Manhattan is equivalent to someone making $26,092, according to the New York Daily News."

Extrapolate that out, and $250K (which would be huge to me too!) is equivalent to about $108K. So, my point was that while $250K is rich in some places, in others it is not. Therefore, using one number to draw the line on who should have their taxes raised doesn't really make sense.

[OldBay]

Location makes a huge difference.

http://www.huffingtonpost.com/2012/0...eNevada_County

"In New York, the minimum wage is $7.25, far below the $11.86 an hour it takes to actually live in the city, according to the Living Wage Project. And it takes six figures to effectively belong in the city's middle class. A 2009 study from the Center for an Urban Future found that someone making $60,000 and living in Manhattan is equivalent to someone making $26,092, according to the New York Daily News."

Extrapolate that out, and $250K (which would be huge to me too!) is equivalent to about $108K. So, my point was that while $250K is rich in some places, in others it is not. Therefore, using one number to draw the line on who should have their taxes raised doesn't really make sense.

It might be more accurate to say that income above a certain level is rich (whether that number is 250K or 400K is debatable - but we are talking about the top 2% of the population regardless) but the cost of living varies greatly geographically. Taxes are not imposed on what you save but on what you earn - unless you get to define your income as "carried interest" to minimize taxes.

[flyboy56]

Sadly, I am less and less able to believe this. The President offered to raise his long-held earnings number of $250K to $400K, and some in the GOP countered with $1 million. Boehner could not even gain support for that high number.

What I would have liked to see the GOP do was agree to the $400K (with annual increases built in) AND insist that specified spending cuts be included in the agreement/bill.

But, instead of making a counter offer, they simply let Boehner know any tax increase wouldn't be supported. I am seriously thinking of changing my party affiliation.

I think both sides are posturing and looking to blame each other at our expense. They've forgotten that their main role is to serve all of us, not just the loudest voices in their parties.

The GOP is waiting to see what spending cuts will take place. These negotiations are not a one way street people! But all we have been talking about is tax increases.

[ybnormal]

It must be noted that this debate didn't just start a couple of weeks ago. It started back in October 2011. And these idiots still can't reach an agreement. It's not about the country, it's all about them, pleasing their lobbyists and special interest groups and being re-elected. Does everyone, well, everyone who actually works/worked for a living, realize just how serious this financial snafu really is? How it will force this country back into a deep recession. How the country will lose it's credit rating? The middle-class will get nailed with higher taxes, higher tax rates, higher costs for everything. Here's what's at stake:

1.Your Income Tax Rates Will Go Up The expiration of the Bush-era tax cuts on Dec. 31 means nearly every American taxpayer will see their rates go up when the rates go back to their 2001 levels. President Obama’s plan to avert the cliff includes keeping the current rates for middle- and low-income earners, while allowing the rates to increase for the highest income levels from 35 to 39.6 percent. Republicans have pushed to keep the tax cuts for everyone.
2.Your 2012 Tax Bill Will Be Huge As many as 28 million Americans are about to be slammed with the alternative minimum tax because a "patch" to adjust the AMT for inflation will not go into effect unless Congress acts. For middle-class households with kids and earning around $75,000, the AMT will add $3,700 on average to the tax bill for 2012 alone.
3.Your Paycheck Will Be Smaller The first paycheck of the year is going to be smaller for up to 125 million Americans after the Social Security payroll tax holiday expires on Dec. 31, raising the rate from 4.2 to 6.2 percent.
4.Your Tax Refund Will Be Delayed The Internal Revenue Service has said that without a deal by Dec. 31, tax refunds could be delayed for as many as 100 million taxpayers as the government agency scrambles to revise tax forms to reflect the changes post-cliff.
5.Your Kids Will Cost You More Money Among the tax credits that expire on Dec. 31 are several that help lower- and middle-income families with kids, including the Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit, and the American Opportunity Credit. All four revert to lower levels on Jan. 1, which could cost families hundreds to thousands of dollars in lost tax credits, according to CNN Money.
6.You Cannot Collect Extended Unemployment As many 2 million unemployed Americans won’t be able to collect extended benefits after Jan. 1, when the federal government’s unemployment extension ends as part of automatic spending cuts.
7.Your Stocks Could Wobble The stock market tumbled on Thursday after Senate Majority Leader Harry Reid (D-Nev.) said it looked like the country was going to go over the fiscal cliff. Uncertainty over taxes could create more market volatility, experts say, but there is a silver lining: The Fed has promised to keep interest rates low for the next year, and that could help stabilize the economy overall.
8.If You Use Medicare, It Will Be Harder To Find A Doctor One of the spending cuts that will be enacted on Jan. 1 is a 30 percent reduction in the rates Medicare pays doctors. According to physicians' groups, the pending change has already sent doctors fleeing some health care plans, Forbes reported.
9.Finding A New Job Will Be More Difficult Mandatory spending cuts slated to start on Jan. 1 will cut into government jobs and jobs dependent on federal contracts. One report from George Mason University estimated that the cuts could cost 2.14 million jobs, the Christian Science Monitor reported.
10.High Earners Will Pay New Taxes For Obamacare High-earning taxpayers will pay a new 3.8 percent tax hike on net investment income, including income from interest, dividends, capital gains, rental and royalty income. Much of that same income group is also subject to a new .9 percent increase in Medicare taxes. These tax hikes are part of the Affordable Care Act and go into effect on Jan. 1.

Now, if you're sucking of the state's teet, you have nothing to worry about.

[jessup270]

Location makes a huge difference.

http://www.huffingtonpost.com/2012/0...eNevada_County

"In New York, the minimum wage is $7.25, far below the $11.86 an hour it takes to actually live in the city, according to the Living Wage Project. And it takes six figures to effectively belong in the city's middle class. A 2009 study from the Center for an Urban Future found that someone making $60,000 and living in Manhattan is equivalent to someone making $26,092, according to the New York Daily News."

Extrapolate that out, and $250K (which would be huge to me too!) is equivalent to about $108K. So, my point was that while $250K is rich in some places, in others it is not. Therefore, using one number to draw the line on who should have their taxes raised doesn't really make sense.

I have lived in Maryland, Colorado and Florida during my lifetime.

I really feel that with the exception of housing, the cost of living is very similar all over the country.

The following is nearly the same everywhere:

A gallon of milk
Gasoline (FL, CO and MD are about equal)
The cost to buy a car (sticker price)
Furniture
Clothes (especially in national chains)
Meals (especially in national chains)
Groceries
Utilities

Yes, New York does have higher housing prices, however, in the NY metro area, a car is not usually required. No car expenses, saves lots of money.

Based on my experiences, every time you saved some money in one part of the country, you paid higher for something else:

FL no state income tax, you pay more for auto and homeowners insurance.

CO has lower auto and homeowners insurance, you pay a state income tax, plus an annual renewal of your vehicle plate on a newer car is around $350.

MD has a state income tax and housing can be expensive, however, jobs are more plentiful and have higher hourly rates.

[jessup270]

My wife works in a commercial tax return prep office, it is common to hear people with children getting back between $3,000 and $9,000, after having paid little into the Treasury.

IMO if you have child that is physically or mentally disabled, you should get a special credit, otherwise, just a standard deduction.

[Contumacious]

The Real Fiscal Cliff

"The only reason the automatic spending cuts exist at all is that Congress lacked the integrity to identify specifics. Rest assured that Congress will likely engineer yet another escape hatch when it finds itself backed into a corner again. Repealing the cuts before they are even implemented will render laughable any subsequent deficit reduction plans. But politicians would always rather face frustration for inaction than outright anger for actual decisions. In truth though, only an extremely small portion of the cuts are scheduled to occur in 2013 anyway. If it comes to pass that Congress cannot even keep its spending cut promises for one year, how can they be expected to do so for ten?"

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AS PREDICTED


Obama, lawmakers discuss short-term fiscal deal


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[flyboy56]

Democrats are confused now because they realize they did not call the Republicans bluff. Now they will force this through because they know they have more to lose politically considering it will go down as Obama's legacy. Recession, recession, recession!

[flyboy56]

This is it folks. Obama is just talking about tax increases for the wealthy and to extend the unemployment for 2 million people. That the deal he expects Republicans to go for. No spending cuts on the table at all. This is not the act of a great President, only a good one. Obama is just giving the people what they want and not what they need. Where is his political will?