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Sources: NYT see also NYT

Category: Digital Media, Taxes and Policy

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

22 Responses to “Details of the New Fiscal Deal”

  1. DeDude says:

    As with any political compromise it is a mixture of good and bad.

    We should have increased income tax rates on all six figure incomes, and made all income taxable by the same rates (no special breaks for unearned income). But the fact that we at least got some serious and permanent increase in the top tax rate is progress, and so is the increase in the top capital gains rate from 15 to 23.8% (including the new Medicare tax). A permanent AMT fix is also a positive since it will force a more honest budget projection.

  2. carleric says:

    So we fed the pigs and helped to insure that incumbents will be reelected….enough to gladden the hearts of the parasites…

  3. SecondLook says:

    According to various quick takes blogged, the result, in terms of taxation, is a 2% increase for those with incomes below $120,000 – via the end of the SS tax holiday, an increase of about 2.25% effectively for those at $400,000 plus; and an average increase of less than 1% for those in the sweet spot between those income levels.

    The obvious solution would have been to increase the SS cap up to $400,000, which would have made that group pay as much the lower 95%. However, that would also up the top group’s taxes by another relatively small amount – clearly a deal breaker.
    Also, it would have nearly solved any financing problems that SS will have, and we can’t have that, can we?

  4. Northeaster says:

    We still live in a Banana Republic.

    Nothing has changed except the numbers of people being hurt by decades of crony corruption, and it doesn’t matter if you’re a Democrat or Republican.

  5. ilsm says:

    Another step toward Norquist dystopia.

  6. ES says:

    > The obvious solution would have been to increase the SS cap up to $400,000, which would have made that group pay as much the lower 95%. However, that would also up the top group’s taxes by another relatively small amount – clearly a deal breaker.
    Also, it would have nearly solved any financing problems that SS will have, and we can’t have that, can we?
    ————————————–

    Raising the SSN cap limit would’ve brought up the question of also increasing the cap on SSN payments, as official SSN is “not a tax”.

    As for your other point, everybody else also gets the same 2% tax increase on SSN, in addition to all the other tax increases. A working couple making 250K gets2% SSN increase plus they are going to be hit with the new AMT.

  7. Pantmaker says:

    Kudos to you Barry for being one of the lone voices on the absurdity of the “Fiscal Cliff”. To think that the details of the “New Fiscal Deal” don’t even put a dent in the longer term problems we have created for ourselves is nauseating….and we rally on it!?!? It’s like the guy who got a last minute payday loan for another bag of dope thinking he’s got his life straightened out now.

  8. econimonium says:

    ES you’re wrong about the 2%SS because there’s a cap. A working couple only gets taxed the extra 2% on all income below 110,100. Everything beyond that is not taxed. So if you make 250k, do the math. It’s NOT 2% of the income. In fact, it’s slightly less than 1%.

    Does anyone actually know how to do math any more or do they just shoot off their mouths and think they’re smart?

  9. WFTA says:

    Big rally.
    Should the axiom be “Buy the sizzle; sell the steak.?”

  10. mathman says:

    http://readersupportednews.org/opinion2/277-75/15346-focus-4-reasons-the-fiscal-cliff-is-worse-than-it-looks

    1.Setting Up the Next Extortion
    2.Hiking Taxes for Working Americans; A Million Jobs Lost
    3.Compromising the Compromising President
    4.Feeding the Deficit Distraction

    (second to bottom-line conclusion)
    Americans are struggling with mass unemployment, declining wages, increasing insecurity, Gilded Age inequality. Trimming the deficit addresses none of these, and is likely to slow growth, making things worse.

    This is how an economic collapse works, i guess. i wonder if the Romans did it this way. How soon before people start “reacting” to all this austerity (before the lights go out)?

  11. ES says:

    > ES you’re wrong about the 2%SS because there’s a cap. A working couple only gets taxed the extra 2% on all income below 110,100

    I belong to a working couple, I get taxed on 110K and my husband gets taxed on 110K, i.e. we get 2% tax increase on 220K of income, just for starters.

  12. G3 says:

    The 1.67 million annual income for the top 1% seems too high.

  13. JimRino says:

    The Rich 1% Win Again.
    With dividend and capital gains only going to 20%, they get compounded growth for doing nothing, while we work our nuts off, actually working.

  14. JimRino says:

    But, what we really need is a Romney-Tax-Avoidance-Tax-And-Penalty, for the big cheats.

  15. JimRino says:

    There should have been a stimulus bill for roads and bridges.
    There should be a gas tax increase already.

  16. SecondLook says:

    ES

    You’re correct that a household with two equal earners making up to $227,400 will be paying 2% more of their income through their SS contribution. (The 2013 income cap for contributions will be $113,700, up from $110,100). However, that is a rather uncommon situation.

    However, a single income household making that $227,100 will be paying only 1% more than they already are. Households, whether single or multiple income, will have a declining percentage given higher earnings. My basic point.

    There is a sweet spot gap for certain incomes under the proposed legislation, it’s clear, except apparently to the people who wrote the bill.

    On the flip side, that two income couple you cited will get receiving jointly (at current amounts) $5066/month from SS at full retirement, as opposed to half that for the single income.

  17. theexpertisin says:

    JimRino…

    Why should those driving an electric or hybrid skip out on the gas tax? Let’s eliminate the gas tax and charge a road use tax of 25%, maybe more, on the cost of each new vehicle, and a prorated road use tax on used jalopies at the point of sale.

    If true to form, the government in a few years will be taxing anything that uses wheels, including baby strollers and roller blades.

  18. DiggidyDan says:

    I would put a tax on all people who stand in water. . . Surely this would solve the lot!

  19. Syd says:

    I’m willing to concede that it would be prudent to reduce the Federal budget deficit significantly over ten years, and that to be fair, the pain should be shared. But the unfolding deficit reduction program is tilting heavily towards spending cuts over revenue increases, and that seems unfair to me, especially since tax cuts played such a significant part in creating the deficit in the first place.

    According to the CBPP analysis (link below), if further deficit reduction (yet to be enacted) is split evenly between spending cuts and revenue increases, that would result in an overall ratio of 1.8 to 1 (spending cuts to revenue increases). If Obama gives ground on raising more revenue (which he probably will), the outcome will be even more lopsided.

    http://www.offthechartsblog.org/the-next-act-further-deficit-reduction-must-include-a-mix-of-revenues-and-spending-cuts/

  20. bear_in_mind says:

    Anyone know if there was a change in the tax treatment of municipal bonds?! Both Obama and Boehner were leaning toward eliminating the tax exemption on munis, but since this deal was done by Biden and McConnell, it’s anyone’s guess if it stayed or went.

  21. DeDude says:

    @theexpertsin;

    We need a tax specifically on gas to discourage the use of this toxic product, and to make sure that the social cost of creating pollution and global warming is carried to some extend by those who pollute (a carbon tax would be better). We could use some of that gas tax revenue to pay the cost of cleanup after hurricanes and to pay for oil wars.

  22. rd says:

    econimonium:

    The Social Security FICA tax has a $110,100 income cap per SSN. A couple where each spouse is making $125k would end up paying the extra 2% on $220k of income out of their $250k, or $4400 extra. All else being equal, you pay less tax per household if one individual has the vast majority of the income than if it is equally split once one income starts going over the cap.

    However since FICA is not a tax in the Land of Norquist, it does not help pay for government services (including Social Security) that are almost completely paid for by the wealthy and it doesn’t really matter to your household finances.

    ~~

    BR: It just went up to $113k