Fiscal Cliff?

Robert

Robert

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OK, what's the story here?
UK news bulletins are full of snippets about the US heading for the "fiscal cliff".

I have no idea what it is - to be blunt, it sounds like a lot of manufactured nonsense - however, those of you who live there will hopefully be able to summarise.
 
A simplified explanation is a hard debt ceiling that was written into law by GWB. If Congress and the president cannot come to an agreement to reduce spending and increase revenue to reverse the debt situation by Jan 1st, draconian automatic cuts to entitlements and tax increases will come into play. Poor and middle class will pay $3,000-$4,000 more a year in taxes on average and social security checks will be slashed.

$0.02 explanation.
 
redrumloa said:
A simplified explanation is a hard debt ceiling that was written into law by GWB. If Congress and the president cannot come to an agreement to reduce spending and increase revenue to reverse the debt situation by Jan 1st, draconian automatic cuts to entitlements and tax increases will come into play. Poor and middle class will pay $3,000-$4,000 more a year in taxes on average and social security checks will be slashed.
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Medicaid and Social Services are exempt. The Bush tax cuts will expire. Pensioners will not notice much change, the poor won't either. The middle class will pay a few hundred more a year in tax. The jobless will have their benefits impacted. The economy will likely slow due to decreased government spending so unemployment will go up. The wealthy will see their taxes go up considerably. This is where the problem is and why all the wealthy people funded think tanks and all the wealthy people owned media and all the wealthy TV talking heads are in an uproar and trying to panic the common folks.

(Yes, $20 million a year anchors like to think that they are middle class. Mathematically it ain't so)
 
Dead rich people will face more taxes. The currently when you die you can pass on $5Million tax free. Above that the tax rate is 35%. The 'Fiscal Cliff' returns this to a $1Million tax free level. Above those levels the tax is 55%.
 
FluffyMcDeath said:
Medicaid and Social Services are exempt. The Bush tax cuts will expire. Pensioners will not notice much change, the poor won't either. The middle class will pay a few hundred more a year in tax. The jobless will have their benefits impacted. The economy will likely slow due to decreased government spending so unemployment will go up. The wealthy will see their taxes go up considerably. This is where the problem is and why all the wealthy people funded think tanks and all the wealthy people owned media and all the wealthy TV talking heads are in an uproar and trying to panic the common folks.

(Yes, $20 million a year anchors like to think that they are middle class. Mathematically it ain't so)
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Unfortunately it is not that simple. It would effect 88 percent of U.S. taxpayers, with taxes rising by an average of $3,500 a year.

What is on the table is pretty important to the poor and middle class. The mortgage interest tax deduction may go away. Millions of families are under water on their mortgage and paying the mortgage like chumps because it is "the right thing to do". If it goes away, expect another huge wave of forclosures as camel's back is broken not by a straw, but a pile of bricks. Hell, if it goes away *I* may just walk away from my house.

There is also the Earned Income Tax Credit which is essentially reverse taxation for poor to lower-middle class people with children. This is almost certainly going to go away and will cause great anguish to people who have come to expect this money as their god given right.

No matter which way this goes, it will likely be painful for many people.
 
redrumloa said:
Unfortunately it is not that simple. It would effect 88 percent of U.S. taxpayers, with taxes rising by an average of $3,500 a year.
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What average? How does it actually work out?

The mortgage interest tax deduction may go away.
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That's something that has helped distort home prices and subsidize banks. If it may go away then it may hurt people. Will it go away?

There is also the Earned Income Tax Credit which is essentially reverse taxation for poor to lower-middle class people with children. This is almost certainly going to go away and will cause great anguish to people who have come to expect this money as their god given right.
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Almost certainly? Will it go away or won't it? What's going to happen if no new agreement happens has already been written into the legislation. There shouldn't be any mays and most likelies in it.
No matter which way this goes, it will likely be painful for many people.
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And if they put in different legislation it will probably be worse for most people because the people who are most likely to be favoured by any new deal will be the rentiers.
 
the point is that the über rich will plead that they can't afford to pay more taxes and this needs to be passed on to the unimportant people (the 99%)

the morons in congress can't come up with something rational because they are sucking on the 1% teat
 
You know, at some point in time people will have to realize they have to get organized, start backing Occupy, start backing their unions, start standing as one. They will have to take a leaf out of old Ben Franklin's book.

"We must all hang together, or assuredly we shall all hang separately."
 
redrumloa said:
Unfortunately it is not that simple. It would effect 88 percent of U.S. taxpayers, with taxes rising by an average of $3,500 a year.
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It's unfair to represent this as an average. Afterall the average American family will not see the $3,500 a year average in tax increase. The average sized family - 2 parents 2 kids - making $75K/year would see about a $2K/year increase. Additionally that Average family averages closer to $55K.

This might help: http://www.washingtonpost.com/wp-srv/special/business/tax-cut-scenarios/

If we have a bar giving drinks to 4 homeless/jobless guys and in walks Bill Gates it's true the average person is a multi-millionaire with a home. Let's be careful with our statistics out there kids.

No matter which way this goes, it will likely be painful for many people.
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True.
What the Republicans did was kick the can down the street and prayed to God they'd win the White House and could fix this their way. Well, Nov came and the Republican's lost their bet. Which is why the majority of Americans rightly see this problem on the heads of Republicans to come through. If the Republicans hope to win 2014 seats they will not allow the increase in taxes for long. And the Dems aren't going to go with no taxes on everyone. The Republicans really are behind the 8 ball here. They can probably name the $/yr rate who will retain this tax. Since the majority of their voters are rich white men they really are stuck slitting their own throats to one degree or another.
 
WE HAVE PASSED THAT POINT OF NO RETURN’: RON PAUL


“I think we have passed that point of no return where we can actually get our house in order,” Rep. Paul said Friday on CNBC. “I believe there is too much bipartisanship on the spending. Nobody is talking about cutting any spending.”

“Republicans and Democrats,” he continued, “they pretend they’re fighting up there, but they really aren’t. They’re arguing over power, spin, and who looks good, and who looks bad, but they’re all trying to preserve this system where they can spend what they want, take care of their friends, and let the Fed print money when they need it.”
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So what little things did they slip into the bill that was sooo very important to pass?
 
There are a whole lot of people retiring in the i.r.s. / g.s.a. I don't know what the significance of this is. Do they see a change coming for their pension?
 
The Republicans apparently aren't getting it still. In 2011 we saw the USA's credit rating lowered from AAA status because as the report said - "We have changed our assumption on this because the majority of Republicans in Congress continue to resist any measure that would raise revenues, a position we believe Congress reinforced by passing the act." Well, we're there again folks. The Republican House is dragging their feet on increasing spending limits or reducing spending.

The Republicans are clearly lost the 2012 elections. They're causing themselves to lose the 2014 if they don't soon get with the act and realize most Americans want higher taxes on the wealthy. And realize that neither taxes nor cuts can do this alone we must do both.

Fiscall Cliff II - here we come.
 
You kidding me? Raise revenues? Spend spend spend:fail:
 
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