Cliffmas...........

Ho Ho Ho, Merry Cliffmas.

I had read several conservative blogs before the election that were touting that Obama wants to go over the fiscal cliff because it's a means to get massive tax hikes (as in more revenue to spend).  The theory was that if he can blame the republicans for not agreeing to tax increases then it will be all their fault.

I pretty much gave it the eye roll from a conspiracy theory standpoint, but based on the progress so far and what the administration is coming to the table with I'm seriously starting to question if they don't want us to go over the cliff.

Oh well, I guess we get to sit back and watch it all go down.

I have only seen snippets of the presidents plan versus the republicans plan. What I did not like about the republicans plan is asking to reduce benefits for Medicare and Social Security when many of those folks really rely on those programs to keep food on the table and a roof over their heads at this point. Any reduction to the benefits going to those folks will mean a real hardship on a lot of the elderly. I do think they need to be reformed and changed, but not at the expense of those who would suffer.

I also think the presidents plan, from what I read, was a little to little and I did not hear it mention much in the way of cuts, just increased tax revenue. All in all this is going to be interesting the closer it gets to the end of the year - not to mention the roller coaster stock market will go through.

Did any of you hear about the petition on the whitehouse website to stop paying all congressmen and the president until they can actually do their jobs, work together, and solve some problems? It is an interesting thought but given how rich some (most?) of the politicians are independantly already, they probably would not care, but the symbolism is in the right place.

Neither side is even attempting to solve the problem. Obama wants more revenue and more spending. Rep's want to cut SS/Medicare and no revenue. So we will get big cuts and more revenue when we go "over the cliff". In the long run, it's probably what's best for our long term economic health.

I would have to agree with this. It will be painful in the short term but we cannot keep pretending that things are sustainable the way they are.

The same can be said for the "other side".  Congressman Rand Paul has said going over the cliff wouldn't be such a bad thing because we need the spending cuts and if it means do it the hard sequestration way, that's better than not making the cuts at all.

Let's get to the "meat of the matter":  Republicans have to give on raising rates for the top 2%.  Extend the Bush era tax cuts for all but the top 2%.  Eliminating loopholes and capping deductions with no details is just kicking the can.  Polls show most Americans are onboard with this and many in that 2% have said they're willing to pay more.  I don't know who the Republicans are pandering to?

Democrats have to put Social Security, Medicare and Medicaid on the table.  The programs need to be preserved, but even in their current state, not dealing with their swelling costs is their kicking the can.  You HAVE to deal with it eventually and get those costs down - might as well put it on the table now.

I think defense spending cuts is a foregone conclusion.  Just better to do it in a managed, controlled way to which you can identify exactly where the cuts will be made is so much better than an ugly half-billion across-the-board slash.

No one's going over a "cliff".  One of three things is most likely to happen:

1. Some agreement is made at the last minute.
2. They find some way to avoid it, stall and kick the can down the road yet again.
3. They re-label it to something "softer" and soften the sequestration blow by implementing it over a longer stretch of time.  Stalling... but with marketing.

Oh and...  Isn't "Merry Cliffmas" offensive to some?  Shouldn't we be saying "Happy Cliffmadays" instead?  After all, there is a war on Cliffmas.

Hard to argue with that. 

I tend to think option 2 will happen.  On December 31 they will vote to extend the fiscal cliff until December of 2016.  :-/

Maybe those in the upper 0.1% are happy to pay more.  I don't see too many people making say $255k-300k (the small business owners) saying they are happy with paying more taxes.

^^^This.  If Warren and his buddies have disposable income to light one fire (give to a free-spending government), then make it so.  But, for the rest of the 2%, show us some spending constraints first.

Warren is too busy fighting the IRS about the $1 billion in back taxes his company owes while saying the rich should pay more.  That much hypocrisy must be tiring.

Well that's the idea.  In order to make a dent in the Federal defecit, all 3 below need to be done.  No single one or even two is enough to do it.

1. Cut Federal spending.  (Focus on the "biggest ticket items":  Social Security, Medicare, Defense, Medicaid)
2. Raise tax revenues (preferably a known such as rates, rather than an unknown such as eliminating loopholes and capping deductions.  Although both would be preferable as well; rates on the highest 2% go up along with reducing loopholes and capping deductions).
3. Lower unemployment by increasing economic growth and consumer spending.

I would hope that everyone knows it's unfair to ask for either just #1 or #2, and relying on just #3 is just too much of an unknown as the market drives it more than government.

Would you be willing to settle for, "for the rest of the 2%, we would be willing to handle it if we see that at the same time, there's a serious effort to implement spending constraints."

Good synopsis BFD.  I agree with Tuwood.  Option 2 is most likely course of action. 

I do not know why it should be the "2%"s responsibility to pay for it.  That is my major objection to this idea.  You want the bennies, pay for them, do not vote yourself largess out of someone elses pocket!

x2  ...but but FAIR share!

Just what Kate says above.  I have no issues paying more taxes, if and when real tax reform is enacted.  Don't start with "we'll just tax you more".

I know that most people want to increase taxes and decrease spending, but I still say the root issue is not revenue.  It's too dam much spending.

Take a look at this chart:
http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=200

During the second Clinton term tax revenues were hovering around $2T per year, but we kept our spending under that $2T mark which resulted in budget surpluses each year.

Continue to watch year after year and our revenues have increased relatively on par with inflation, but our spending has gone postal.  Yes, the wars contributed to the spending, but the bailouts and entitlements have absolutely exploded the deficit.  The Bush tax cuts didn't do anything to the deficit because taxes effect revenue, we don't spend money on taxes.  If the revenue remained relatively neutral then the tax cuts are a wash.

Yes, we can raise taxes to increase the revenue side to close the gap, but my question is why?  If my kid goes hog wild running up credit cards for 8 years I don't reward them by giving them a bigger allowance if they cut back their credit card spending by 50%.

On a side note, I'm curious that they almost double our tax revenues by 2017 on that chart.  Wonder how that's gonna happen by just taxing the fat cats. 

for a second I thought our local weather guru had become famous:

http://cliffmass.blogspot.com/

I always believed in cutting military by like 1/2 until now

http://www.huffingtonpost.com/2012/12/03/death-star-white-house_n_2234375.html

This will solve all our problems.  Thing about how many jobs that will create and it will keep the local systems in line.

Yes, sadly, I am afraid you are correct.

When people who are opposites agree you know it must be true.   I third that statement.  It takes people willing go lose there jobs in congress to fix it.  No one will do that.  

There are no easy solutions to this mess.  It scares me when I hear all the stupid things congressmen says at times that they are the ones who have to fix this.

I fourth it.

Let's talk a little about fair.  Now if you set aside, "I earned it, it's mine." and "redistribution of wealth." and just accept the fact that one role of "government" is to redistribute monies from those who earn a lot to those have less and need some form of help.  That a wealthy person's "fair share" is percentage higher than a poorer person's "fair share"...

Taxes are never simple and numbers can be made to sway arguments in many decisions.  But in very simplistic terms, if you compare these four people:  'Poor", "Middle", "Upper", "Wealthy", and "Rich".  These number are of course very general and rough estimates:

Poor earns      $35K   a year, about $1,800 a month net on a 15% tax bracket.
Middle earns   $50K   a year, about $2,500 a month net on a 15% tax bracket.
Upper earns    $100K a year, about $5,100 a month net on a 25% tax bracket.
Wealthy earns $250K a year, about $12,750 a month net on a 33% tax bracket.
Rich earns       $500K a year, about $25,500 a month net on a 35% tax bracket.

If we talk about "my 2K" or about $2,000 a year in tax increases, roughly 2% tax rate increase.

Poor pays       $60   more per month off of $1,800 and takes a HUGE hit.
Middle pays    $85   more per month off of $2,550 and takes a BIG hit.
Upper pays     $160 more per month off of $5,100 and takes a small hit.
Wealthy pays  $420 more per month off of $12,750 and takes a hardly noticable hit.
Rich pays        $830 more per month off of $25,500 and would hardly feel it at all.

The increase may be the same across the board.  But since the cost of living and inflation have raised prices while wages have remain stagnant, the poorer you are, the more every dollar counts.  A 2% hike to someone earning $35,000 per year means food.  A 2% hike to Mr./Mrs. Wealthy and Rich doesn't mean as much.  When you earn more to where taxes are a financial number and don't equate to lifestyle, but "extras" - that's what we're talking about.

What is so wrong with?

Poor pays        no    more per month off of $1,800.
Middle pays     no    more per month off of $2,550.
Upper pays      no    more per month off of $5,100.
Wealthy pays  $420 more per month off of $12,750 and takes a hardly noticable hit.
Rich pays        $830 more per month off of $25,500 and would hardly feel it at all.

Oh and...  Mr./Mrs. Ultra-Rich who earns dividends and interest on $200 million, pulls in $4 million a year from that and only pays 15% taxes... Now that's just robbery!

I WISH I were in the top 2% and could afford to pay an extra $250-$1,000 more per month in taxes!

And yes, if that were me, I would want and demand my government to be efficient with my money and demand that they reduce spending as well.  If my government wants me to pay more to pay down the deficit to benefit my children's future, than yes, I would demand that it actually pay down the deficit and not be used to prop up current spending levels.  That side of the argument was and remains valid IMHO.