primusfan

So, as I'm sure we all know by now, the US is approaching a pretty big issue. Between Bush-Obama tax cuts expiring and huge spending cuts from the debt ceiling crisis taking effect, we are fast approaching a "fiscal cliff". In more detail (from Wiki), the following policies are set to take effect on January 1, 2013:

• Expiration of the Obama tax cuts provided for in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

• Across-the-board spending cuts ("sequestration") to most discretionary programs as directed by the Budget Control Act of 2011

• Reversion of the Alternative Minimum Tax thresholds to their 2000 tax year levels

• Expiration of measures delaying the Medicare Sustainable Growth Rate from going into effect (the "doc fix"), most recently extended by the Middle Class Tax Relief and Job Creation Act of 2012 (MCTRJCA)

• Expiration of the 2% Social Security payroll tax cut, most recently extended by MCTRJCA

• Expiration of federal unemployment benefits, most recently extended by MCTRJCA

• New taxes imposed by the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010.

So do we compromise? And if so, how exactly? Not raising tax rates but closing deductions and loopholes? Negotiating on cutting less? Or do we maintain gridlock and go off the cliff? Would we be better or worse in the long run?

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Diamond Dave

but what does it all meeean Basil?

EDIT: all good, now updated

gl hf

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Dreadnought

Mr. President I don't like what I'm seeing. Shall I turn it off?

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Thecla

Apart from people having to pay more taxes (which no one likes but don't americans pay low taxes anyway comparing to the rest of the world?) why is this such a bad thing?

It's an honest question, I don't really understand whats happening and I'm curious

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Diamond Dave

well the tax breaks were in place to help pull the economy out of recession. If they start reintroducing the higher tax rates now, the worry is that the economy isn't strong enough to withstand it yet (e.g. more stuff like this happens) and could plunge right back down again.

EDIT: but the problem is the governments hand is being forced by the national debt situation.

roughly... I've just tried to catch up with a bit of googling in the last 10 minutes

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metacarpi

Bros?

Bros.

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primusfan

They're basically projecting that it will cause another recession as it will put more pressure on the private sector with the tax increases while simultaneously cutting government's ability to create jobs via spending cuts. CBO projects the unemployment rate will go back to 9.1%.

If we were to keep everything as is we would eventually reach another fiscal crisis where our debt becomes so exorbitant that we would no longer be able to borrow money at reasonable interest rates and would likewise be screwed.

So they want to compromise by cutting spending and extending the tax cuts while closing loopholes and deductions (so that people in the highest bracket pay a higher effective rate, closer to or at the 35%).

Part of me says **** it though. Let's go off the cliff. We might go into recession, but it might be the best option long term. But I'm not really decided either way.

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ErikLensherr

Compromise with House Republicans essentially means adopting their positions. Let them "compromise" with us for once. Or let's just go off the cliff.

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magnus_maximus

Tax the rich to pay for tax cuts for everyone else.

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StillSublime

I mean yeah, if you want your government to steal your money and give it to lazy fucks on welfare, be my guest.

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Diamond Dave

because that's all governments do with tax money

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L2112Lif

Yeah, except for the Bush Era tax cuts, those bastards...

It is a little bit scary, but elections are out of the way until congressional elections in 2014, so... Not... Super... Worried?

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Diamond Dave

oh ok, well like I said I'm a recent follower of the situation

thanks for the extra info.

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brownshirt1

The sky is falling, the sky is falling!

Thecla

What is so good in having another recession? If you would go off the cliff and a recession follows somewhere along the line there have to be measures taken to get out of it again. Why not take measures before a recession happens?

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~And the raindrops in the cars

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Blocking out a good song

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Arby911

What a GREAT idea, I'm amazed no one has thought of this before...


Too bad there aren't enough rich folks to tax...so in order for your plan to work, we'll need more rich folks.

Any thoughts on where we might get them?


On topic, count me on the side of the cliff divers...I'd rather have some economic pain now instead of economic collapse due to unsustainable borrowing and spending in the future.

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magnus_maximus

Well aren't you a good little Christian angel.

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Quote:

Originally Posted by Voltaire We look to Scotland for all our ideas of civilisation.

magnus_maximus

Wh...what?


What?


What?

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Quote:

Originally Posted by Voltaire We look to Scotland for all our ideas of civilisation.

primusfan

Well yeah, but you have to take into account that their whole reason for being obstructionist was to get rid of Obama. And he won in a landslide, liberals got more seats in the Senate and in House races, Democrats won the national popular vote (when added together) and if not for GOP redistricting in several states, might have taken the House quite possibly. Or at least closed in on them.

Basically, things aren't looking good for Republicans and they know at this point if something bad happens, they'll be blamed for it. So he came out saying they would not support any tax increases. But he said we need additional revenue. Code for "we need more tax money." So basically they're saying we can make the effective rate higher by closing loopholes and deductions.

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