Senate Fiscal Cliff Doomsday Countdown Thread

Okay, in fairness, until you said that and got me to go look the damn thing up, I had no idea incomes above $110k were exempt. Now that I've been arsed to do a modicum of research, I actually am pissed. Foot status on this one: squarely in mouth.

Seems like a king's ransom to me, but okay.

 

how about doing both of those things, guy?

 

At least you took the time to look it up Ramza. That wasn't a part of this fiscal cliff situation as much, but the dems just walked away from the payroll holiday altogether. I just hope they realize how much that might impact people's income and spending in the coming year........especially once people start seeing the hit on their paychecks.

The other really regressive tax is the alternative minimum tax. That and the payroll tax both hit working folks.

 

yeah the amt is obnoxious.

 

So I looked up the AMT...it seems you have to pay a minimum of 26% of your income as income tax? Is that how it works?

 

Maybe rather than raising the tax rate, they should remove the cap? Any research on that and its impact (it's nearly midnight; I'm too lazy to go poke around the internet for theories.)

I'm also of the opinion that worrying about taxes on wages ignore the fact that the more money you have, the less likely the bulk of it comes from wages - anyone want to talk about that? I understand the concept of "double taxation" in certain cases as previously brought up, but is it more complicated than much of what little I've heard?

 

marcus, it was originally introduced as a way to prevent folks with extremely large amounts of income from paying no income tax due to various deductions, which was apparently happening in the late sixties. the basic idea was you would pay the higher of the two rates, either your regular income tax with whatever deductions, or the AMT, which allows no personal deductions. now it's all screwed up because 1. when rates were cut across the board in 2001/3, the amt rate was left untouched. and 2. it was never indexed for inflation, so in some cases a large family that is bringing in say 75,000 and that lives in an area of the country with a very high standard of living would have to pay the AMT, which was never meant to happen.

the history and full nature of it is a bit more complicated than this, but i believe this is the basic idea.

 

That last bit (well known in Australia as 'bracket creep') seems like the biggest problem, because 26% isn't exactly a devastating tax rate, IMO. Our basic rates from 37K upwards are 32.5% + 1.5% for Medicare.

 

The Senate has passed a deal. Bush tax rates go up, but only at the $400/450 mark instead of the $200/250 mark. It also permanently fixes the AMT, extends the "doc fix" for a year, delays the spending cuts for 2 months, extends unemployment benefits for a year, and some other stuff I'm too tired to list right now. Still too early to tell what the House will do.

 

I'm guessing that unless Boehner gains force choke abilities to get his people in line.

 

As long as Boehner brings it to the floor, the Democrats can pass it. Largely because Pelosi isn't a feckless cry baby who is constantly getting stampeded by her caucus.

 

Strictly speaking, they used the thumbs incorrectly in Gladiator.


Anyway, here's CBS' report on (some) of the provisions the Senate leadership's agreed to:

• • Tax rates: Current tax rates will be extended for all wage earners making below $400,000 and couples making below $450,000.
    
    This was a key concession for both Republicans and Democrats. Democrats wanted the threshold for tax increases to rest at $250,000 and Republicans didn't want marginal tax rates to increase for anyone.​

• • The estate tax: It was set to increase from rom 35 percent to 55 percent in 2013. Instead, the compromise sets the new rate at 40 percent with the first $5 million worth of property exempt from being taxed.​

• • Capital gains tax: Capital gains and dividend tax rates will increase from 15 to 20 percent.​

• • Alternative Minimum Tax: A permanent fix to the tax that would hit middle class families​

• • "Doc Fix": Doctors will be shielded from a massive reimbursement gap for treating Medicare patients.​

• • Unemployment benefits: Unemployed workers will receive their benefits which expired over the weekend.​

• Renewable energy tax credit: The tax credit for renewable energy companies will be extended for another year.​

It adds about 600 billion in revenues. Which is a start.
The sequester is still being worked out, obviously. the 110 billion in automatic cuts won't be happening for another two months. The debt ceiling won't be reached for two months either, so we'll have an awesome throwdown about that AND the sequester happening at the same time.

 

Six hundred billion? How did we "negotiate" to a number that was less than John Boehner's initial offer?

 

Beats me with how amazingly transparent this whole mess has been. /s

 

At least the sequester in 2 months will now be half revenue increases and half spending cuts. And entitlements arn't touched at all. And the AMT is permanently fixed.

 

POLITICS!

 

yeah bracket creep. well i used the example of the large family because they are eligible for (substantial, i believe) tax breaks based on the number of dependents, which are not permitted under AMT. so it can hurt depending on the circumstances.

...you guys have kiddie income tax rates?

 

how did they "fix" the AMT?

 

liberalism

 

With, you know, "accounting tricks".

 

They increased when it begins to apply and indexed it to inflation, I think.



Anyways, Eric Cantor says he cannot support the Senate bill. So it will probably die in the House.

 

And we're back to being screwed. I say recall them all.

 

That's nonsense. Grouping them together is just plain stupid.

Let's follow that complete lack of rationality. Let's say you recall them all. Who replaces them? Guess who: People from the same districts and states where all of them came from.

 

Yes, because it is important to remember it is always some other district's senator/representative that is "the problem." Not the one(s) you helped elect. Any kind of mass "recall" or dump-out-of-office dumps the very people you want to remain to solve the problem the "others" are preventing solving.

Alas, dump the idiots is not a real or effective solution.

 

Update on the staircase situation: Cantor and his minions are balking at the deal, and it looks like the deal could be dead.