Jump Off The Cliff!
Obama must be tight. I mean, SUPER tight. He’d been talking about this “fiscal cliff” business with Congressional leaders for months now and they’ve made no progress. The broken nature of our legislative/executive branch relationship continues in full force. Le sigh. Wait, let me digress for one brief moment:
To the person or persons that coined the term “fiscal cliff” — a hot blast of shame upon thee, I say! Fiscal CLIFF? How much more ominous can that possibly be? Just like the whole 2012 Mayan prediction of gloom and doom, the term “fiscal cliff” implies the same kind of wild imagery that the mainstream media loves to perpetuate… and perpetuate they did. Ugh, disgusting.
ANYWAY, back to my thoughts on this matter. I do think the Bush-era tax cuts have to go. Prez Bush made a grave error in pushing those tax cuts into law in the first place and this is something that needs to be corrected. (He cut taxes in the middle of two wars. It’s in part due to this that we’ve lost tremendous streams of revenue for the country.) But the times we live in now require a different way of handling the disbanding of these tax cuts. The one thing that neither party is addressing is the need to increase revenue streams. This is basic math, folks. The more tax cuts you have, the less revenue that is available to pay down the tremendous amount of debt we have. In fact, in order to fund the tax cuts, we have to borrow more money in order to cover these expenditures. The credit card statement is going to come due in full at some point and we don’t even have a plan of action for addressing it. I’m just waiting for the day that China comes and says, “支付您的债务!” or “Pay off your debts!” Then we’re all screwed. (Thanks, Google Translate — hopefully it’s close..)
So, in truth, this “fiscal cliff” discussion is yet another band-aid on a much larger problem. I’m a fan of the practical approach and how it affects the “little guy”, or as some would say, the 98%. The things that the average American should be prepared for are:
- End of the payroll tax holiday: This is a definite change that will affect each and every single paycheck after January 1st. There will be no extension of this, so be prepared to go back up to 6.2% on your Social Security deductions (+2% off your gross, in case you don’t know what the current deduction is).
- All KINDS of tax changes: Welcome back Alternative Minimum Tax (AMT)! No, we didn’t miss you and you really should just stay gone for good. Make over $250,000 a year? You’re in for a doozie. Make UNDER $250,000? It’s even worse!
- Sayonara, unemployment benefit extension: To the millions of unemployed individuals, you will be a casualty of the government and our stressed economy. The extension on unemployment benefits will be done. But I have something more to say on the job situation in the USA…
- Medicare benefits to your doctor will decrease dramatically: Your doctor may not be seeing you after their payouts start to drop. Likelihood is that they may very well go out of business or be bought up by some larger medical conglomerate. Surely you know that they’re making up the difference of their lost revenue from you, the patient…
USA Today’s got a nice little graph to demonstrate a lot of these “changes”. To be frank though, we have been spoiled for a long time with tax cut after tax cut and in the midst of economic difficulties, something’s got to give. We cannot expect to operate in the same fashion as we always have, especially when it is abundantly clear that we need to “pull up our britches” and get some momentum. We all need to put in our fair share — ALL of us. Personally, I’d like to see a modification to the Social Security cap (not a complete removal because there IS a maximum benefit for Social Security). Let’s be real though: higher taxes on the rich — while satisfying in the short term to the self-professed 99% — will end up being problematic and likely force those individuals and/or companies out of the United States (look at the mass exodus from France and their now “unconstitutional” proposition to tax anyone making over EUR 1 million at a rate of 75%). They won’t all leave, but they’ll find even craftier ways to keep their money outside of the taxable reach of the IRS.
Blanket taxation doesn’t work. Tax cuts without corresponding increases in revenue streams don’t work either. The problem is that the tax system itself is fundamentally flawed… and leaders are missing out on a clear opportunity to do something about it. I’m not an economist, nor am I an expert on tax law. I’m just your average concerned and somewhat informed citizen putting in my two cents. You mean to tell me with all the great minds we have that we can’t come up with a real solution for this? We’re leaving these massive decisions to politicians that don’t have the first clue about the long-term impact of their politically-driven choices?
One last thought: REALLY, Prez? Congress gets a RAISE? For doing nothing? Honestly.
Let’s just jump off the damn cliff already for all the foolish decisions everyone is making. Who will we blame then?