The Fiscal Cliff thread.

[Larry]

Yahoo: Boehner Rejects Obama's Request to Extend Middle Class Tax Cut

Fresh off his reelection as House speaker Wednesday afternoon, John Boehner emphasized the need for bold leadership in order to repair the ailing economy, telling reporters that job creation remains the top priority for congressional Republicans.

"Our majority is a primary line of defense for the American people against a government that spends too much, borrows too much when left unchecked," said Boehner, R-Ohio. "With so many challenges that are ahead of us, the American people need to see us act courageously, think selflessly and lead boldly. And our majority is up to the task, and I expect the president is, as well."

A short time earlier, the House Republican Conference voted Boehner in to another two-year term as speaker.

Boehner rejected the president's call earlier Wednesday for House Republicans to quickly pass Senate legislation that would extend middle class tax cuts, and he alternatively called on the Senate to take up House-passed legislation to extend all of the current tax rates for one year.

"Instead of the House moving on the Senate bill, the Senate ought to move on the House bill," Boehner said.

[HOF44]

I think the only thing that can stop us from going over the cliff is the FUBAR that would be caused by the AMT suddenly hitting so many people. The IRS has decided to not reprogram in anticipation of a settlement of some kind. They said if non occurs some might not be able to FILE a return until late March.

[thebluefood]

Great, we're going to jump off the fiscal cliff and go into another recession just as I'm graduating from college. Awesome.

Anyone have some rope I can borrow?

[Larry]

I think the only thing that can stop us from going over the cliff is the FUBAR that would be caused by the AMT suddenly hitting so many people. The IRS has decided to not reprogram in anticipation of a settlement of some kind. They said if non occurs some might not be able to FILE a return until late March.

Uh, I don't think the fiscal cliff will affect the taxes people file this coming April a bit. I think it will only affect money that people earn in '13 (and pay taxes on in '14.)

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Great, we're going to jump off the fiscal cliff and go into another recession just as I'm graduating from college. Awesome.

Anyone have some rope I can borrow?

Got any gold? Or ammo?

[SnyderShrugged]

LOL, and just think all this is over how much to reduce the increases in spending rather than any real reductions.

[HOF44]

Uh, I don't think the fiscal cliff will affect the taxes people file this coming April a bit. I think it will only affect money that people earn in '13 (and pay taxes on in '14.)

Hatch is the senior Republican on the Senate Finance Committee. Miller wrote the letter in response to inquiries from Congress about the impact on the IRS of the year-end “fiscal cliff,” which threatens to dramatically change tax policy on several fronts, including the AMT.

WP: AMT could keep 60 million taxpayers from filing returns till March, delaying refunds

[Larry]

WP: AMT could keep 60 million taxpayers from filing returns till March, delaying refunds

I'm really surprised that that could be the result of this law. It would seem to be an ex post facto law. Raising the taxes on income after you've received the income.

(Although, I suppose it could be argued that the tax increase was written into the law more than a year ago, and all they're debating is whether to pass an ex post facto cut.)

[Kindred]

Having trouble grasping your first sentence. But I think I agree with your second.

Tax increases are bad for the economy. Always.
Spending cuts are bad for the economy. Always.

And raising taxes and cutting spending, all at once, in an economy as fragile as this one? That's even worse than usual.

But, it has to be done, eventually.

If I were in charge, my first action would be to extend the Bush Tax Cuts, on the "bottom 95%", for one year. (In fact, if I could somehow pass a rule saying that, one year from now, they can't be extended except by a 60% vote, in both houses? I'd do that.)

(And, I wonder if maybe extending the payroll tax cut might not have a bigger effect on the economy. I could certainly see that argument.)

Tax increases on the rich have minimal impact on the economy, tax increases on the poor will have huge affects.

[Larry]

Tax increases on the rich have minimal impact on the economy, tax increases on the poor will have huge affects.

While I will agree that, to me at least, there seems to be historical evidence to support that, I will suggest that your assertion isn't quite as rock solid as your declaration would suggest.

[HOF44]

I'm really surprised that that could be the result of this law. It would seem to be an ex post facto law. Raising the taxes on income after you've received the income.

(Although, I suppose it could be argued that the tax increase was written into the law more than a year ago, and all they're debating is whether to pass an ex post facto cut.)

I've read in some articles that some may even be penalized for lack of withholding even though their employers were following the set of tax tables recommended by the government. Like I said theis could be a HUGE fiasco if something is not done.

[Kindred]

While I will agree that, to me at least, there seems to be historical evidence to support that, I will suggest that your assertion isn't quite as rock solid as your declaration would suggest.

Think about it, will the rich change their buying habits because of a tax increase that is barely a fraction of their wealth? Will the poor change their buying habits because of a tax that significantly impacts the amount of discretionary funds they have available? Where is the majority of demand in this economy coming from, the select few millionaires or the millions of poor/middle class?

[Riggo-toni]

Extend the payrolll tax cut another year. Eliminate a few loopholes and extend part or all of the Bush tax cuts another year. Do NOT back off the sequestration/mandated spending cuts. Our economic downturn has been caused by consumer debt and a collapse in the housing market. It took Obama et al almost 4 years to expand the HARP program to effectively deal with the latter.
Spending at an unsustainable 24% of GDP does no good - screw the Keynesian graphs based on a non-existent universe of a self-contained national economy and paper money.
While in most scenarios I would prefer lowering the top tax rate to incentivize the economy,our current dilemna mandates lower rates for middle income earners to pay off debts. I do not advocate this out of some class warrior conviction, but rather as a targeted remedy for our current woes. I would not, for example, have been in favor of such a policy 10 years ago.
Actually, a decade ago I would have been in favor of phasing down the home mortgage subsidy as a way to force the wealthy to pay more. Now, such a change might aggravate the fragile housing market.

[Tulane Skins Fan]

LOL, and just think all this is over how much to reduce the increases in spending rather than any real reductions.

What?

[Popeman38]

What?

Are you really going to claim that 0.25% reduction in spending is a cut?

[Tulane Skins Fan]

Are you really going to claim that 0.25% reduction in spending is a cut?

The debate is not all about the spending cuts. That's what I'm claiming.