The Fiscal Cliff thread.

[Thiebear]

Under the proposed accord being hammered out by Biden and McConnell, households earning less than $450,000 would largely escape higher income tax bills, though couples earning more than $300,000 a year and individuals earning more than $250,000 would lose part of the value of their exemptions and itemized deductions, under the terms of the emerging agreement.

Low-income households would also benefit from a five-year extension of credits for college tuition and the working poor first enacted as part of Obama’s stimulus package in 2009. And businesses would see a variety of popular tax breaks extended, including a credit for research and development.

The tax on inherited estates would rise from 35 percent to 40 percent, though Democrats agreed to keep in place the current exemption for estates worth up to $5 million. And nearly 30 million households would be protected from paying the costly alternative minimum tax for the first time — either on their 2012 tax returns or at any time in the future. The developing agreement calls for a permanent fix

First blush
http://www.washingtonpost.com/busine...c_story_1.html

I'm slightly stunned at how balanced it seems ... I must be missing something.

[Fergasun]

I know its only a drop in the bucket; but I thought the $250k threshold was important, and I'm mad at Congress for being shaky on that level... really it is 2% of Americans who have an income over that threshold, and they didn't want to raise taxes on those 2%?!

Oh, I just read in your post the AMT patch is permanent.... hooray!

Let's all start chanting "two more months! two more months!" because we get to roll straight to a debt ceiling fight.... omfgjustmakeitstop! Please do the massive tax reform/entitlement change by 2014 because I never want to hear our two political parties argue over the budget ever again.... it's maddening.... and if my whole political life is spent like the past 2 years have been spent I'm going to form a third party myself somehow.

[Gallen5862]

http://www.huffingtonpost.com/2012/1...n_2348269.html

Fiscal Cliff Deal Reached: White House, Hill Leaders Agree To Delay Sequester By Two Months

WASHINGTON -- Three hours shy of the midnight deadline, the White House and congressional leaders reached a deal to avert the so-called fiscal cliff, several sources confirmed to The Huffington Post.

Under the deal brokered by Vice President Joe Biden and Senate Minority Leader Mitch McConnell (R-Ky.), Congress would extend the Bush income tax cuts below the $400,000 threshold, keep the estate tax threshold at $5 million and extend unemployment benefits. It would also temporarily delay the sequester -- i.e., billions of dollars in across-the-board spending cuts -- for another two months.

[spjunkies]

They need to reach a REAL deal within the next month so we won't have to rinse and repeat when this temporary fix expires.

[AsburySkinsFan]

Typical gamesmanship, it's like bartering over a price you know before you begin where you'll end up yet they press it and milk every ounce of political nonsense from it.

[Elessar78]

The problem is that both sides are reading from the same negotiation play book. The "action" trigger was a time limit and the negotiation play book tells you to take all the time given in hopes that the other side caves. Since there was no actual skin in the game they had no motivation to seal the deal any earlier. What needs to happen is that the politicians need to set the deadline in October 2 years from now so it'll be fresh in voters minds who acted and who did not.

[Toe Jam]

Meanwhile, our debt continues to mount. This is BS, I want a real deal.

[mikered30]

Are we just kicking the can down the road?

[zoony]

After tomorrow, republicans can agree to a compromise and claim they are voting to cut taxes. Word is more will come on board.

Disgusting

[Fergasun]

Meanwhile, our debt continues to mount. This is BS, I want a real deal.

If you want that type of deal you'll get a 5-10 hit to GDP.... they were talking about these "fiscal cliff" cuts as something like a 3% hit to GDP, and this was just a spending decrease. By a "real deal" do you mean something like Simpson-Bowles? I doubt that we'll get even close to Simpson-Bowles as long as Obama is President; because I think their plan leans more conservative 70/30. The Democrats could strip out some of the conservative items in it; but it doesn't seem likely until 2014. If the GOP wants to "broaden the tax base" and do "tax reform" in 2014 (which is my code for cutting taxes for the rich), they need to give up something... but they always act like the debt ceiling is the give... why?

The real elephant in the room is that our debt is being driven by out of control health care costs. Health care costs which the government will gladly pay. Any attempt at "cost control" will bring the "death panel" cries!

Make no mistake about this deal; in the 2011 deal, the Tea Party was heard. What the Tea Party didn't realize was that elections have consequences, and the re-election of Obama plus failure of the GOP to make gains in the Senate may pretty much further cuts in jeopardy. But at least they can probably feel good about keeping spending level to the FY2010 levels (I want to say discretionary spending has been kept level to there).

It will be fun to watch the House debate this tommorrow as well.... this is going to be a vote that passes, but it'll be something like 218 to 217....

---------- Post added December-31st-2012 at 10:03 PM ----------

The point I wanted to make with the first line (hit to GDP) was this:
The GOP will stand up and bluster about how big government doesn't "create jobs" all they want, the deficits and government spending is bad, etc.. But when push comes to shove, I don't need much evidence to see that this viewpoint, which is at the center of their platform, is horse manure. They can't even fool me on the "freedom" and "look at how much debt we are putting onto our children" argument; which I know will be in full force in the House tommorrow and probably were in the Senate today (I didn't follow much). If they really believed that, they would have allowed the fiscal cliff to occur; remove government spending from this year, and ask folks to pay more in taxes.

But all I heard for 2 months was how we need to avert the fiscal cliff, because the cuts were disastrous, because GDP is going to take a hit. The Tea Party, if they are serious need to sell the American people on this point.... why tank the economy for some time? Why are you willing to own this tanking of the economy, and explain how it is good for the nation to go through this "government adjustment". Unfortunately, they haven't won the argument for the two years in which they had to make it (2010 to 2012... I am aware the "Tea Party" sprouted up in 2009 time frame but they only got their hands in power in 2010). My take at the time is that Tea Party was just a GOP re-brand of their consevative wing.


But the bottom line is that you need to find 218 votes in the House and 51 in the Senate to support the viewpoint (it's okay to tank the economy and get government spending under control)... and then you'll need to sustain that through at least an election cycle.

[Special K]

Typical gamesmanship, it's like bartering over a price you know before you begin where you'll end up yet they press it and milk every ounce of political nonsense from it.

Exactly.

I remember dealing with this 11th hour bullcrap when working for FEMA during Hurricane Irene/Tropical Storm Lee last year. I think they were arguing about debt ceiling at that point in time, I don't even remember, it's all a haze to me now, and FEMA funding was one of the pawns used in their political wrangling. As usual, it came down to the last hour. In the meantime, that day, with 100's of disaster survivors seeking help in my DRC alone, we had to start packing all our equipment up and every single FEMA staff prepare to fly home the next morning if a deal wasn't reached. We knew they were going to strike a deal, but we had to go through the motions and freak out a ton of people in the process

Our government is a flippin circus. It's embarrassing.

They need to reach a REAL deal within the next month so we won't have to rinse and repeat when this temporary fix expires.

Oh worry not, they won't.

[SpringfieldSkins]

So...

Here's my Cliffs Notes.

We are cool for another two months. Then we do it again.

Amirite?

[Elessar78]

WaPo: http://www.washingtonpost.com/busine...c_story_1.html

Sen. Tom Harkin (D-Iowa) said: “If you make $250,000 a year, you’re not middle class. You’re in the top 2 percent of income earners in America...

Sure, if you don't live in a major metro area that's a ton of money. I'd rather that group be taxed, and the way the richest counties voted they don't mind either, but this is a reasonable compromise.

[AsburySkinsFan]

WaPo: http://www.washingtonpost.com/busine...c_story_1.html

Sure, if you don't live in a major metro area that's a ton of money. I'd rather that group be taxed, and the way the richest counties voted they don't mind either, but this is a reasonable compromise.

I understand what you're saying, but Harkin did say "top 2 percent...in America" obviously there are pockets where they aren't just the 2% but those pockets themselves are in the upper class when compared to the rest of the country. To put it in a bit of context, someone who earns $250,000 per year makes nearly 10 times the amount of the average worker here in Kentucky. So the $250K earner makes in about a month and a half what the average Kentucky worker makes all year. And yes, cost of living is higher, but let's not kid ourselves.

[skinfan2k]

WaPo: http://www.washingtonpost.com/busine...c_story_1.html



Sure, if you don't live in a major metro area that's a ton of money. I'd rather that group be taxed, and the way the richest counties voted they don't mind either, but this is a reasonable compromise.

Nope, it just means you don't know how to control your spending and have expensive taste