Already I am hearing and reading from the MSM that favorite red herring: The largest tax increase in American history! That tired old meme makes me want to barf.
I am going to rename the "fiscal cliff", Y2K12, that hysterical non-event in the late nineties when computers, software and digital devices would fail to roll from 1999 to 2000 and reign chaos upon the globe. I thought of the little boy who cried wolf when my Pentium I and digital clocks all read Jan 1, 2000 when I went downstairs to get a bowl of Rice Crispies that next morning. Billions of dollars in sales of patches and Y2K compatible devices had saved the planet from digital collapse and mass hysteria. Whew, I was relieved. I remember telling my partner Johnnie, "What a load of BS from the media"
However we are now confronted with a greater threat than Muslims and computers that can't count... The looming Y2K12 event (and the end of the Mayan calendar).
Terror, fear and propaganda have no bounds! The rich will have to pay more in income and capital gains tax, so the end of the world is definitely at hand... again.
Some thoughts below the orange ganja bud.
A great resource for specifics is found at Tax Policy Center. org
It's a good read for wonks.
President Obama has proposed extending the Bush-era tax cuts for all but the highest-income households and Republicans want to extend the cuts for everyone. As you can see from the above chart, we cannot afford to extend the tax cuts for everyone. And those who make less than $250,000/yr will not pay more. 125 Million tax units.
25,000,000 tax units above $250,000/yr income will pay more.
His proposal to tax incomes above $250,000 was key to his campaign and support from the grassroots voters who voted for him. The Republicans are holding the lowest and poorest Americans hostage in this situation.
While uncertainty over the fiscal cliff dominates most conversations, the relative strength of the underlying U.S. economy should not be forgotten. The expansion is today on firmer footing today than at any point in the past three to four years. No major economic imbalance exists. Moreover, headwinds that have hindered the pace of recovery are fading.Don't be afraid one bit of Taxarmageddon. We are going to add $400-500 million to the 2013 Federal balance sheet next year. If we go through a slight economic dip, we'll come roaring back and millionaires and billionaires will barely notice that they are paying Clinton era tax rates. By the end of Obama's termit is projected that the deficit will reduce 1 trillion dollars more sans recovery.
The bottom line is that the US economy may be better positioned to withstand greater fiscal drag than many currently believe. While going over the so-called fiscal cliff (in its entirety) would almost certainly lead to a sharp contraction in economic activity in early 2013, the improving economic base we now observe leads us to conclude that such a downturn would likely be short-lived.
Our 16 trillion dollar economy is resilient and I plan to celebrate January 1st with a bowl of snap, crackle, pop.