Saturday, January 05, 2013

A little more ranting about the fiscal cliff deal

This rant was posted as part of the ShadowTrader Weekend update, in things you should give a pip about
Our fearless leaders have stared into the abyss of the fiscal cliff and did not flinch. They have saved the day. Oh wait, no they didn’t, they flinched like a Chihuahua on Red Bulls. They didn’t solve our fiscal cliff problem, they whined and cried and demanded until the solution made no one happy.
They increased taxes enough to bring in $60 billion a year, less than 2% of just the deficit portion of the spending and made it so we wouldn’t hit the debt ceiling for a WHOLE 2 MONTHS. In doing so they raised the taxes on the average household by $2000 per year (not just the rich), enough to hurt everyone a little. But don’t worry, they will have to come up with something else in the next 60 days that certainly will hurt more.
Again, I am not blaming one party. It is ridiculous to assume that the debt problems can be solved with raising taxes alone or lowering spending alone. This will require both. What we have now is just enough tax increase to reduce consumer spending and slow the economy. Most economists now are expecting the GDP to stop growing and some deflationary pressures in the market.
To our politicians, Congress, The House of Representatives and the White House: That is quite the solution you provided. The nation, we the people, democrats, republicans, libertarians, constitutionalists and all others in poll after poll are calling on both spending cuts and increases in taxes to avoid the debt problems. Have you forgotten what it is like to live within a budget? We understand a budget and what it takes to get it under control. Your bickering and unwillingness to compromise is childish and petty at best. The solution you provided and approved is not what we know is needed. Way to stand your ground on the principles that don’t reflect those principles of your constituents, the people you were elected to represent.
Come together. get it together, get it resolved.

Wednesday, January 02, 2013

Can Kicked Down the Road

Well this comes as no shock. We have a temporary fix to the fiscal cliff. The can was kicked down the road. The solution they provided created increased revenues of $600 billion over the next 10 years. This increase in revenues is a very small amount when looking at the $16 trillion. The "highlights" though pretty dim are as follows:

-- The tax rate for individuals making more than $400,000 and couples making more than $450,000 will rise from the current 35% to the Clinton-era rate of 39.6%.

-- Itemized deductions will be capped for individuals making $250,000 and for married couples making $300,000.

-- Taxes on inherited estates will go up to 40% from 35%.

-- Unemployment insurance will be extended for a year for 2 million people.

-- The alternative minimum tax, a perennial issue, will be permanently adjusted for inflation.

-- Child care, tuition and research and development tax credits will be renewed.

-- The "Doc Fix" -- reimbursements for doctors who take Medicare patients -- will continue, but it won't be paid for out of the Obama administration's signature health care law.

These changes don't include the changes in the payroll taxes that will be increased as of January 1. The change in payroll taxes will impact the majority of earners. Payroll taxes were reduced in 2011 and will increase from 4.2% from 6.2% again immediately. This means those earning $30,000 will pay an average of $50 a month more. Those that make near $120,000 will pay $200 a month more. This means there will be less spendable income which, as said before, will slow the economy.