Wednesday, January 2, 2013

Fiscal cliff "deal" a bad deal for all taxpayers

The Republicans' compromise - a.k.a. capitulation - has left Americans with a measly $1 in tax cuts for every $41 in tax increases all to avoid the so-called "fiscal cliff" that was created by Congress itself.

Now, thanks to this "compromise" 77 percent of all American households will pay higher taxes, including more than 80 percent of households with incomes of $50,000 or higher.

Sen. Pat Toomey, R-Pa. said "this legislation is the best we could do for taxpayers and job seekers." Really? The top personal income-tax rate goes from 35 percent to 41 percent (when deduction "reform" is included). The death tax goes from 35 percent to 40 percent. The capital gains tax rises from 15 percent to 23.8 percent (as does the tax on dividends). How does any of this help tax payers?

Small businesses - the largest job providers in America - will be particularly hard hit. As The Wall Street Journal reported, "the real marginal tax rate on a dollar of investment income from bank savings or money-market accounts will be about 46 percent (and more like 55 percent or higher when state taxes are figured in)."

When combined with the spending plans of those in control of the purse strings (e.g., $4 million for electric motorcycle makers, $59 million for algae growers) we're going to see an additional $4 trillion added to the deficit over the next decade.

Real spending cuts and "reform" will come later, Republicans insist. I personally don't believe them. Basically we just got the largest tax increase in a generation without so much as a passing glance at the real issue: government's spending problem.

How can we stop this madness? Our country is at stake and nobody in Washington seems to realize that - or even care.

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