‘Fiscal Cliff’ talks still uncertain.
It’s less than a month before the ‘fiscal cliff’ but the White House and the Congress are yet to reach a common ground.
Last week, the White House delivered a $1.6 trillion proposal that presses for higher federal tax rates on higher income tax brackets- as well as the power for the President to raise the national debt limit- in an effort to tame the effects of the impending year-end fiscal disaster. Republicans were quick to counter the White House plan with their version of ‘fiscal cliff’ proposal submitted to the Congress on Monday. Republicans strongly oppose federal tax rate increase, and instead aims to avert the effects of tax cut expirations and automatic federal tax rate increases by curbing federal spending on benefit programs such as Medicare and Medicaid.
White House and Republican point persons have been busily running around this week- appearing on interviews to reiterate why or why not federal taxes should increase- but there is still very little progress in the negotiations. Based on the current pace of negotiations, an understanding may not be reached until the day before the ‘fiscal cliff.’
The ‘fiscal cliff’ is the term used to refer to the fiscal crisis to be faced by the US government by the end of 2012 due to the concurrent expiration of federal unemployment benefits and the Bush federal tax cuts, as well as the commencement of the Budget Control Act of 2011. Federal tax rates for payrolls will rise from 4.2 to 6.2 percent and taxpayers will have to pay additional federal taxes for Medicare.
Categories: Federal Tax Tags: buffet rule, federal income tax, federal tax, fiscall cliff, income tax, republican, tax code, tax law, tax reform
Grover warns of tea party resurrection; Mitchell: ‘fiscal cliff’ not the problem
With less than one month before the ‘fiscal cliff,’ both White House and Republican parties display an unrelenting tone and are still unable to come up with an agreement that will help avert the effects of the brewing storm of automatic spending cuts and higher federal tax rates by 2013.
Negotiations have been made, but so far no common ground has been reached. President Obama and his Democrat allies have earlier proposed a $1.6 trillion fiscal cliff proposal that presses mainly for higher federal tax rates for the wealthy, which is promptly countered by the $2.2 billion Republican plan that centers on curbing federal tax spending instead of levying higher federal taxes.
In NBC’s “Meet the Press,” Grover Norquist- author of the no-new-taxes pledge and one of the main influences in the GOP debates- warned of a tea party revival if Pres. Obama “pushes the country over the fiscal cliff.”
The fiscal cliff has serious implications: the expiration of the Bush federal tax cuts will raise the current federal tax rates; the expiration of Payroll Tax Cut will raise the rate to up to 2 percent; the commencement of the Budget Control Act will automatically cut back federal tax spending; and the implementation of the Affordable Care Act will result to additional federal taxes.
However, Cato Institute fellow Daniel Mitchell argues that the problem is not the fiscal cliff. “In a competitive global economy, for instance, it is bizarrely self-destructive to increase the double taxation of dividends and capital gains,” writes Mitchell.
Categories: Federal Tax, Income Tax, Tax Law Tags: federal income tax, federal tax, fiscal cliff, grover norquist, republican, tax code, tax pledge, tax reform
Boehner and the Republicans stall fiscal cliff progress again
WASHINGTON: As the election cycle comes to an end the American people spoke with resounding force that fixing the fiscal cliff should involve tax cuts on the wealthy. Republicans seemingly bought into the idea striking down their anti tax pledges and committing to work in a bipartisan manner in getting this issue resolved, however today has proven that both parties are loud on words and short on action. A once bright light of promise has now dimmed to the bleakness of impending doom as Republicans once more stand by their insistence on cutting spending without raising taxes on the wealthy.
Speaker of the House John Boehner (R Ohio) seemed someone gloomy after having a call with Obama on Wednesday followed by a face to face with Treasury Secretary Tim Geithner the day following. The bid Geithner proposed was Obama’s latest effort to find bipartisan resolve to this neverending crisis. The offer included approximately 1.6 trillion in new revenues by levying a tax on the wealthy while simultaneously cutting spending in a fair and balanced approach.
In this budget included stimulus pork of $50 billion, aid to homeowners underwater in their house payments and unemployment benefit extensions in the amount of $30 billion dollars. The new budget also posed new rules of dealing with raising the debt limit. As you remember this was the the debacle that led to a lowering of our credit rating. A move largely blamed on Republicans unwillingness to compromise.
Boehner was, to say the least, very disappointed. In his mind compromise consists of no give and take just take. With four weeks before the fiscal cliff takes effect, this is no laughing matter. The Republican party needs to begin taking this seriously before these automatic cuts take place sending the economy back into a recession say experts.
Neither party moved from their positions they were previously and Republicans are taking a stand against only raising taxes on the wealthy. These automatic tax increases would affect 98% of the population if something isn’t done soon.
Some think that this is political posturing for a party that is becoming, largely unpopular with the common man, As it stands now if taxes increase on anyone besides the wealthy the Republicans are to blame. This will essentially add a tax hike of over $2,200 to the average household’s tax bill. With 98% of the population at risk for this $2,200 tax increase the Republicans are against the wall and have no where to run.
Republicans no longer have popular support and their arguments against this fair and balanced approach are slowly running out of steam. This political posturing and do nothing congress mentality not only hurts our future, it hurts our image to the rest of the world.
Both sides do agree that a fair and balanced approach needs to be taken to avert this disaster that includes revenue increases as well as spending cuts however the details of that are still a bit unclear. It seems as if the Republicans still insist on balancing the budget on the backs of those that can least afford it so that they can bow to their masters in fur coats.
With this type of persistent name calling and hostage taking by the Republican party who knows when anything will get done. This may be the beginning of the end of the greatest nation on earth. All because of the bullheadedness of bought and paid for federal officials on capital hill.
Categories: Federal Tax, Income Tax Tags: federal income tax, federal tax, fiscall cliff, grover norquist, republican, Republican Tax, tax code, tax pledge, tax reform