Fiscal Cliff: For or Against it?

[LnGrrrR]

So everyone, what are your thoughts? Should we drive over the cliff, and possibly cause another recession? Or do we put off the long-term pain? If Republicans refuse to raise taxes, no matter what, does the nation even have a choice?

I'm tempted to say let's go over it, because I think we need to raise taxes and reduce the military presence, and I'm ok with cutting spending. Then again, I have a steady job and can afford the tax raises, so I'm a bit biased.

[Wild Cobra]

So everyone, what are your thoughts? Should we drive over the cliff, and possibly cause another recession? Or do we put off the long-term pain? If Republicans refuse to raise taxes, no matter what, does the nation even have a choice?
What if many of us believe that raising taxes won't matter? You lay that out as if the tax rates are established fact. What about those of us who think raising taxes will harm the economy more than help? Besides, there are so few at the higher rates to matter. All it looks like to me is jealousy. People wanting those doing better to feel more pain.

What makes you so certain taxes are the answer? Do you live in a static world?


I'm tempted to say let's go over it, because I think we need to raise taxes and reduce the military presence, and I'm ok with cutting spending. Then again, I have a steady job and can afford the tax raises, so I'm a bit biased.

Spending is the answer. We need deep spending cuts. We need to get people off the handout programs and back to work. In my opinion, the answer lies in the trade balance between nations.

[CosmicCowboy]

I would accept a 5/1 ratio immediate cuts/immediate tax increases

[101A]

My 18 year old son is going for his physical at MEPS next week; might not ship out for months (Navy Nuke). He's driving me crazy at home - I don't mind defense cuts, but the cliff is coming too soon; he might not get in under the wire.

So, in the proud tradition of voting self-interestedly, I'm against the fiscal cliff.

[Wild Cobra]

I would accept a 5/1 ratio immediate cuts/immediate tax increases
The problem is, the tax increase would need to come from the working people. Get rid of the added child care credits and restore the pre Bush tax cut rates. There isn't enough revenue generated by increasing only the top marginal rates.

[Drachen]

The problem is, the tax increase would need to come from the working people. Get rid of the added child care credits and restore the pre Bush tax cut rates. There isn't enough revenue generated by increasing only the top marginal rates.

A ratio is completely independent of where the money comes from WC.

[ChumpDumper]

http://starcasm.net/wp-content/uploads/2011/05/Thelma_Louise_cliff.jpg
Let's do this.

[z0sa]

For it. Raising taxes and cutting spending sounds sort of like the exact fucking thing this country needs.

[ElNono]

let's do it

[vy65]

^^bad fucking idea

[ChumpDumper]

I know. I just wanted to use the pic.

[ElNono]

^^bad fucking idea

why? other than the "increase in tax will hurt the economy"

[ChumpDumper]

Well, it brings up a question: Why are recessions seen as unnatural events to be avoided with all possible government intervention?

[Clipper Nation]

Tbh, 4 more years of the status quo makes going over the cliff inevitable....

[LnGrrrR]

What if many of us believe that raising taxes won't matter? You lay that out as if the tax rates are established fact. What about those of us who think raising taxes will harm the economy more than help? Besides, there are so few at the higher rates to matter. All it looks like to me is jealousy. People wanting those doing better to feel more pain.

What makes you so certain taxes are the answer? Do you live in a static world?

Spending is the answer. We need deep spending cuts. We need to get people off the handout programs and back to work. In my opinion, the answer lies in the trade balance between nations.

Considering that at least half the country thinks that raising taxes WILL matter, the Republicans should probably bend a little on this. After all, it's not like Democrats are saying that they won't cut spending if taxes are raised.

What makes you so certain that spending is the answer? :lol After all, if we have enough taxes, we could afford spending!

[LnGrrrR]

The problem is, the tax increase would need to come from the working people. Get rid of the added child care credits and restore the pre Bush tax cut rates. There isn't enough revenue generated by increasing only the top marginal rates.

You know the tax increase would pretty much hit everyone, right?

[Agloco]

For it. Raising taxes and cutting spending sounds sort of like the exact fucking thing this country needs.

This. I'm all for it.

[Latarian Milton]

just force them chinks to remit the whole debt they're owed by us, problems solved

[Capt Bringdown]

Fiscal cliff = phony crisis

[SnakeBoy]

Considering that at least half the country thinks that raising taxes WILL matter, the Republicans should probably bend a little on this.

Boehner put $800 million in revenue on the table and Obama blew up the deal. With the gang of six the dems wanted a trillion in revenue, the republicans offered to meet them half way with $500 million in revenue and the dems walked away from the table. So what do you mean by "bend a little"?

[TDMVPDPOY]

shit will be done if the senate co-operated, this is what happens when u have a minority govt, shit stalls like hanging dry shit....

[LnGrrrR]

Boehner put $800 million in revenue on the table and Obama blew up the deal. With the gang of six the dems wanted a trillion in revenue, the republicans offered to meet them half way with $500 million in revenue and the dems walked away from the table. So what do you mean by "bend a little"?

Considering that the spending reductions were going to total 3 to 3.5 TRILLION, yes, I'd say that's bending "a little". What I meant to say is, maybe they should bend some more. Just for comparison (and we'll use the 3 trillion number)....

3 trillion looks like:

3,000,000,000,000

800 billion looks like:

800,000,000,000

For a total ratio of 3.75 to 1 for cuts/raises. Raising it to 1 trillion would've been a 3 to 1 ratio, which I think still would've been quite fair.

Source: http://articles.latimes.com/2011/jul/22/nation/la-na-obama-boehner-20110723

[LnGrrrR]

A caveat to my last post: According to this article:



Back in July, House Speaker John Boehner thought he had reached a big budget deal with President Obama: $1.2 trillion in agency cuts, smaller cost-of-living increases for Social Security recipients, $250 billion in Medicare savings partly achieved by raising the eligibility age. Oh, and $800 billion in new taxes.Then Obama, worried about selling the plan to congressional Dems, decided to try and change the deal (http://www.politico.com/news/stories/0312/74163_Page2.html). This was his plan B, according to The Washington Post (http://www.washingtonpost.com/politics/obamas-evolution-behind-the-failed-grand-bargain-on-the-debt/2012/03/15/gIQAHyyfJS_story_4.html):

His plan backed away from earlier positions on taxes in a number of ways, including pushing the top rate below 35 percent. But there was a deal-breaker for the Republicans — a demand for additional tax increases to match proposed cuts to Medicare and Medicaid. To keep the health-care cuts, a critical component of the deal for the GOP, Republicans would have to swallow about $400 billion more in tax hikes — a 50 percent jump from the figure that had been under discussion.

So, I'm all for eliminating some of the tax complexity, and raising the eligibility age. But Republicans balked at raising the rate on the highest-earners, which seems to be a make or break deal for them. The 800 billion wasn't exactly a tax hike, but:


Here is what my sources tell me: The $800 billion over a decade was going to come from two sources: a) faster economic growth from tax reform (lowering rates and eliminating deductions) and b) greater tax compliance from a simpler system. That doesn’t sound like a tax hike to me.

I'm not an economist, so maybe I'm wrong, but it seems like whenever rich people make more money, it usually gets outsourced to India. Sure, the American people pay less for goods, but the wages don't seem to come back to America often. (That's just my optics; I could be way off.)

[LnGrrrR]

double post

[LnGrrrR]

Oh and one final "for what it's worth" http://www.nytimes.com/2012/04/01/magazine/obama-vs-boehner-who-killed-the-debt-deal.html?pagewanted=all


But few people in Washington actually expected Congress to let most — if any — of the Bush tax cuts lapse anytime soon, and through the more realistic lens of “current policy,” under which all the tax cuts would remain in place, that same 10-year number became something like $35.5 trillion, or $3.5 trillion less.

So if we let the Bush tax cuts expire, it will bring in roughly 3.5 trillion dollars in revenue over the next decade.


How could you make that case? Boehner would argue that some sizable chunk of that money — if not all of it — would come to the government as a result of economic growth spurred by new, lower tax rates, and from better compliance, since the new tax code would be less confusing. Thus, by this feat of actuarial magic, Boehner contended that raising revenue did not require raising taxes, and in fact would enable you to lower them. The math was debatable, certainly, but it was a central tenet of any deal Boehner would negotiate.But then, having worked out a theoretical way to get to the $800 billion that he knew the White House needed, Boehner wasn’t comfortable even putting the figure down on a piece of paper. The idea of any new tax revenue was so heretical to his party, and Boehner was so fearful of the reaction, that his aides felt compelled to come up with a roundabout way of expressing the offer in terms that few people in Washington would be able to decipher, just in case the paper should fall into the wrong — that is, his own party’s — hands. Boehner knew that his position might well imperil his standing as speaker, whether it led to a deal or not, and yet he was taking it anyway.

Who knows? Maybe Boehner and Obama can get together and hammer something through like this again.

[ElNono]

Boehner put $800 million in revenue on the table and Obama blew up the deal. With the gang of six the dems wanted a trillion in revenue, the republicans offered to meet them half way with $500 million in revenue and the dems walked away from the table. So what do you mean by "bend a little"?

Except that what Boehner put on the table wasn't a tax hike, but a tax reform proposal.

[mercos]

Raising taxes does not harm the economy. Ronald Reagan raised taxes, as did Bill Clinton. Taxes are to low now, especially at the high end of the income bracket where much of the wealth in this country currently resides. On the flip side, we don't need mindless spending cuts. We need reforms to the social safety net that promotes upwards mobility instead of dependence. Republicans love to point out the sovereign debt crisis in Europe, but they always fail to mention that austerity has made it much worse.

[Wild Cobra]

You know the tax increase would pretty much hit everyone, right?
Yes.

I say all or nothing. Stop this class warfare.

[LnGrrrR]

So... then you're for going over the cliff?

[z0sa]

Having read just about everything I can about this so called 'cliff,' it seems the only really major issue with it is its abruptness. My response to that is Shit Happens. Combined with tax reform legislation, we will all be better off in a decade. I think everyone agrees at this point that policy change must ultimately occur; why wait?

[vy65]

The economic havoc (not from tax increases, but from the market crash and recession) that would come about from that happening.

[vy65]

Fair point.

But I think it's one thing to say that where a recession is caused by market factors. It's another when that's caused by the government's inability to balance its check book.

Or it might not make a difference, I dunno.

[DUNCANownsKOBE]

I would accept a 5/1 ratio immediate cuts/immediate tax increases

You're a lot more reasonable than the tea baggers in congress then.

[DUNCANownsKOBE]

There are plenty of flaws to our tax code that aren't gonna be fixed. Changing the top marginal rate isn't gonna do jack shit, Wild Cobra is 100% correct there.

There are still people who have a portfolio of municipal bonds in the millions or even billions. It's time muni-bond interest is tax exempt only to a certain number. Someone making 7+ figures in muni bond interest every year shouldn't have all of his income sheltered.

Unlimited tax exemptions like muni-bonds as well as cap gains rates and dividend rates that are laughably low are the problem that needs to be dealt with (and no, anyone who thinks Romney was closing those loopholes is kidding himself).

If the marginal rates returned to pre-Bush tax cut levels but exemptions/loopholes people over-utilize were closed and the cap gains rate was raised, that'd be fine. It's never going to happen though.

[coyotes_geek]

There are plenty of flaws to our tax code that aren't gonna be fixed. Changing the top marginal rate isn't gonna do jack shit, Wild Cobra is 100% correct there.

There are still people who have a portfolio of municipal bonds in the millions or even billions. It's time muni-bond interest is tax exempt only to a certain number. Someone making 7+ figures in muni bond interest every year shouldn't have all of his income sheltered.

Unlimited tax exemptions like muni-bonds as well as cap gains rates and dividend rates that are laughably low are the problem that needs to be dealt with (and no, anyone who thinks Romney was closing those loopholes is kidding himself).

If the marginal rates returned to pre-Bush tax cut levels but exemptions/loopholes people over-utilize were closed and the cap gains rate was raised, that'd be fine. It's never going to happen though.

Anyone who proposes touching the muni bond interest deduction will instantly be shouted down by 50 governors and 1,000 mayors. The guy making 7 figures on interest won't have to say a word. That's one deduction that will never go away.

I'm with you on cap gains though. I'd like to see cap gains rates eliminated entirely with a corresponding reduction in income tax rates.

[boutons_deux]

" it seems the only really major issue with it is its abruptness"

it won't be abrupt, which is exactly what the smart people have been saying all along. The totally deceptive Luntzian "cliff" metaphore is bullshit.

[Nbadan]

The "abrupt' part kicks in when people stop buying US debt, borrowing costs skyrocket, or the GOP refuses to raise the debt ceiling.