I like Bob Schieffer and I hope they do something substantial before 2013, but who knows. Fortunately there is no cliff despite all the hype, it's a slope, nothing actually happens fiscally on Jan 2nd. Unfortunately, markets may overreact, so we may see some volatility while the executive and legislative "chuckleheads" (quoting Rep. Steve LaTourette, R-Ohio) play around. Lots of talk both sides can say they're cutting taxes after they let the Bush tax cuts expire. What a joke...like anyone can't see through the nonsense.I like to get my morning news watching CBS This Morning (Mon - Sat). Bob Schieffer was guest asked today, and put it best. He said something like "I've said it before, I can't believe that both sides are so stupid to not have an agreement and put the nation in a recession." Well said.
+1, now if we could only disolve congress and start over with more objective reps.
Some actually believe going over the cliff is a good thing.
Well, we would be going back to something near the tax and spending levels of the Clinton Administration. If you liked that then, you might like it now?
We might be going back to the tax rates of the Clinton/Gingrich years, but I haven't heard anyone say we'd be going back to the spending levels of those years. If get back to those spending levels, or even back to historic norms, a lot of other problems would be more easily solved. (Disregard "projected" levels below--I don't know the assumptions made)
That's know as the Microsoft fix. You know, Ctrl+Alt+Del, reboot, hope for the best.
Fiscal Cliff - what does it really mean?
1. Payroll tax rate goes from 4.2 to 6.2%
2. Income tax brackets go from 6 to 5. (10, 15, 25, 28, 33, 35) to (15, 28, 31, 36, 40)
3. Capital gain rate goes from 15 to 20% (including lots of minutia detail)
4. Standard deduction for married couples goes from 2x single filers to 1.67x
5. Child tax credit goes from $1000/dependent to $500/dependent.
6. Child dependent care tax credit reduced from $3k to $2.4k per child.
7. Estate tax (death tax) goes up from 35% on estates over $5M to 55% on estates over $1M.
Bold above mine.
Thanks for the nice summary UnderTheRadar.
Wasn't this stuff all meant to be temporary to begin with? Instead of saying "goes to" to describe the changes, shouldn't the expression be "returns to?"
Except for some changes coming out of the current administration to help support the new health care program, aren't we just returning to the tax levels of the recent Clinton administration?
I'm confused by the rhetoric referring to raising taxes on the middle class. The so-called fiscal cliff would simply mean allowing some (very unpopular with one of the major parties at the time) tax cuts to return to their former levels. And those are levels which seemed to have wide support at the time.
What's the big deal? I'm really not looking forward to paying higher fed tax rates and having the marriage penalty restored, etc., as the Bush temporary changes expire. Those tax dollars will come right off the top of our budget. But, hey, more than likely we're going to have to pay the bill eventually. Let's get to it. I suspect folks here on the FIRE Forum know as well as any how to do a bit of belt tightening and still enjoy retired life fully despite having a few les bux to spend.
Those graphs samclem posted above showing the revenue line at or above the spending line for a short time during the Clinton years look very appealing.