Tuesday, December 4, 2012

Fiscal Cliff: Hypocrisy and Stupidity

I think I’ll rant a little about this whole “fiscal cliff” problem. I wanted to point out something that many of you may have missed. Let’s start by stating a few fairly well known facts.

First, the Democrats like to tax and spend. Now in all fairness, the Republicans have been getting pretty good at that too, but the Democrats are the ones best known for it. Second, the “Bush Tax Cuts” are due to expire January 1st, raising everybody’s tax rates.

Normally this would not upset the Democrats, but they know that the “people” would not like that. What they’ve managed to do, and rather artfully, is change the focus. They have been saying “No, we don’t want anybody’s taxes to go up and we’ll pass legislation right now that extends the tax cut of 98% of Americans and only raises it on the op 2% of earners". That very effectively pulled the rug out from under the Republicans who are now made to look like they are willing to let everyone’s taxes go up just to protect the top 2%. And let’s face it. If you ask the average citizen if they should raise taxes, that person will say “hell no”. But if you ask that same person of they should reach a deal raising taxes on 2% of the wealthiest people in the country but leave that person's taxes alone, the answer will be “Of course! They can afford it, I can’t” The Republicans lost this argument before it started. And suppose the Republicans do not compromise and make the deal? Well, they get blamed by a very angry public (which will hurt their chances of taking back the Senate in 2014) and the Democrats will get something they really wanted all along anyway – higher taxes on everybody.

The Republicans have been trying to save face by saying –no, we don’t want to raise tax rates, but we will compromise by allowing you to do away with some deductions to raise revenue. Now stop and think about that for a second. Does that make any sense? You don’t raise the tax rate, but you do away with the deductions so the people still have to pay more tax? You’re still reaching into the same pockets –or are you? Since they have not told us what deductions they want to do anyway with, they may be effectively still raising taxes on many middle class people. Mortgage deductions? –that’s not just for the rich. Charitable deductions? –no, that’s not just for the rich. Taxes on dividends? -Definitely not –many Senior Citizens live off dividends for their retirements…. So, just what deductions are they talking about? I have a feeling we won't  know until they reach an agreement and pass the bill, making it too late for anyone to protest.
Are they going to reach a compromise and avoid taking over the cliff? The pundits all say yes. They will come to some sort of last minute agreement. I hope they are right, but I have my doubts. Besides, any last minute thing they agree to will not solve the problem –that’s still going to be giving us ulcers next year when the new Congress and Senate take over and we see yet again how much can change and still remain the same….

I don't know who he was, but I like him...
Live Long and Prosper...

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