Brace yourself. In a mere 271 days, you and your fellow Americans will be hit with a tax hike the likes of which this country has never seen. The Washington Post aptly called the unprecedented $494 billion tax hike “Taxmageddon,” and Federal Reserve Chairman Ben Bernanke described it as a “massive fiscal cliff.” Whatever your preferred imagery, it’s a really big deal.
Despite all the warnings, President Barack Obama has kept his silence while Congress has made no apparent effort to prevent this impending calamity to families and the economy. The prevailing wisdom is that “something will get done” in a lame duck session of Congress after the election. But why wait? And why after the election?You should know the answer to that by now. Obama does everything for his political convenience and not out of the goodness of his heart. In fact, I doubt that these tax hikes would be touched at all after the election if Obama remains in office. He has increased the deficit from $10T to $15.5T in three short years, with GDP falling and the number of unemployed (paying taxes) rising. His numbers are far worse than Bush's, not that liberal media points that out.
In a new paper, Taxmageddon: Massive Tax Increase Coming in 2013, Heritage’s Curtis Dubay details the tax hikes that will occur if President Obama and Congress do not act before the end of the year:
"Almost 34 percent of the tax increase from Taxmageddon comes from the expiration of the 2001 and 2003 Bush tax cuts. These cuts are best known for reducing marginal income tax rates, but they also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs.
"Another 25 percent of Taxmageddon comes from the expiration of the once-temporary payroll tax cut. The expiration of the patch on the Alternative Minimum Tax (AMT) — which would raise the income threshold over which families qualify for the AMT to prevent middle-income families from paying this tax that is only supposed to impact “the rich” — accounts for 24 percent of the total potential 2013 tax increase."
The balance of the tax hikes comes in part from new taxes under Obamacare, the expiration of tax cuts in the 2009 stimulus, the expiration of a group of policies known as “tax extenders,” changes in the current policy on the death tax (in 2013, it will rise from 35 percent today to 55 percent and the exemption will fall from $5 million to $3.5 million), and the expiration of businesses’ ability to fully expense new capital investments.Take a deep breath. As unlikely as it seems that this current president or current Congress are to do anything about this situation, I doubt it will be left untouched, if only for the simple reason that Obama wants to be reelected and he needs to do or appear to do things that benefit our fragile economy rather than hurt it. I doubt it will stand if only because the warning word is getting out against it, and everyone knows it would bring the economy to a standstill.
Early on in his presidency, Barack Obama said he knew about the impact of taxes. Back in 2009, on a visit to Elkhart, Indiana, Obama emphatically stated his belief that raising taxes in a recession is a bad idea. Though America is not in recession today, it still struggles with very high unemployment, and so the President’s logic applies with equal force — raising taxes is a drag on job creation. Unfortunately, in a speech in Washington on Tuesday, President Obama unabashedly revealed that preventing tax hikes is not his priority. In fact, he wants to see even more taxes imposed on the American people and on job creators all in the name of “fairness” — may of which are in his budget. That’s a political doctrine, not an economic policy, and it’s a proven recipe for economic disaster.If he doesn't take leadership on this issue or blames Congress for inaction, we'll still know he's to blame at the bottom of it. As I have said before, we literally cannot afford more of Barack Obama. We have a problem with runaway spending and Obama's only interest seems to be in adding to it, dragging down the entire economy with his greed for government programs and political control.
We are awaiting a debt implosion. Already we've been downgraded. Already our $15.5T deficit exceeds the entire GDP, and debt per capita exceeds that of Greece. The federal budget increases by 10% automatically each year, since the 1974 Budget Reform Bill allowed it, taking us away from baseline budgeting. This is regardless of revenue, regardless of federal necessity. No wonder the federal government spends $3T annually instead of $2T as in the budget! Even $2T is excessive. There isn't enough money to tax in the entire COUNTRY to make a dent in this deficit. Even taxing at 100%. We need serious reforms such as the GOP presents. And we need them now. Wise Democrats will jump on board if they hope to remain a party with any chance of prominence. Just because liberal media lies and ignores and mocks the truth doesn't make it any less true. We are doomed, and soon, unless we tackle these issues.
We need serious spending reform - not a economically calamitous, enormous $494 billion tax increase which isnn't even sufficient to balance the runaway spending budget. Spending reform must include serious program reforms and a return to baseline budgeting in Washington to tackle this problem before it's too late and the debt conquers our country. At which point there will be no benefits to hand out. So far I only see the GOP willing to make these necessary adjustments. The Dems seem to be happy running off a steep cliff with eyes wide open while expecting to keep running at the bottom of it, with Obama proudly in the lead.