The fiscal cliff choice

Here is the choice that Congress has, as we approach the “fiscal cliff” next Tuesday, when all of the Bush tax cuts expire.  Democrats are willing to renew the tax cuts except for those making over $250,000.  The Republicans want to renew the tax cuts for everyone, including those who make over $250,000.

So either everyone’s taxes will remain at the lower rate except for “the rich.”  OR, if nothing can get passed, everyone‘s taxes will go up, including those of “the rich.”

Anti-tax Republicans are opposing Obama’s plan to let taxes go up for  “the rich” EVEN THOUGH if their efforts to block the proposals are successful, taxes will go up for EVERYONE, including “the rich.”  Thus, anti-tax Republicans will be responsible for everyone’s taxes going up.

I know the principles, the ideals, etc., but can anyone explain what good it will do for Republicans to oppose tax increases for the rich when that will mean tax increases for everyone?

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  • Kirk

    It won’t do anyone any good. But in the House, when you’ve got a weak Speaker and a bunch of idealistic freshman and second termers, the notion that good governance in a mixed body requires compromise is completely lost.

  • Patrick kyle

    The impending ‘fiscal cliff’ is nothing compared to the several ‘cliffs’ looming behind it. This one is about corrupt and inept lawmakers having painted themselves into a corner and the attendant ‘street theater’ as they feint and dodge blame.

  • MarkB

    Although the Republicans are being painted as the villians in this drama, it doesn’t mean a whole lot. Obama, the Democrats and the mainstream media are doing everything they can to destroy the Republicans and the Republicans are too stupid to be able to outfox them.

    To me it would be good to go over that cliff. Repealing the Bush tax cuts would do one thing positive, it would return many of the lower income people to the income tax rolls. Then they too would have a stake in the governance of this country.

    Anyway increasing taxes without a significant upfront decrease in spending will not solve anything. As with all of these political schemes “to save our nation” the taxes are upfront and the spending cuts are way out in the future, which means they will never happen.

  • Steve Billingsley

    Top marginal tax rates are perhaps the most overrated fiscal policy number out there. This is not the hill to die on. For the top 1% of earners – the average actual overall tax rate they pay in federal income taxes is ~27% (that is with the top marginal rate of 35%). In 1960, with a top marginal tax rate of 91% – the average actual overall tax rate for top 1% earners was ~31%. Bumping the top marginal rate to 39.6% (the Clinton era top rate) will affect some earners (particularly small business owners who report business income as personal income) negatively – for others they won’t even notice it and for the top, top earners they can move around whatever they need to so that they aren’t dinged.

    The fact that this is the public face of this debate is just another indicator of how unserious our political class really is….

    Entitlement reform and financial reform (not the kabuki theater that is Dodd/Frank) or much more important than this.

  • Sam Loveall

    “can anyone explain what good it will do for Republicans to oppose tax increases for the rich when that will mean tax increases for everyone?”

    Because it will not stop there. The set of people included in “the rich” will continue to grow. The cut-off income will be brought lower and lower. And the problems won’t be fixed.

    As long as tax receipts are seen as the solution to our economic tragedy, appropriate economic management and government spending will not be introduced in any significantly effective way. Perhaps the only way for the American people to finally accept that is to shove their heads into the economic toilet and flush several times, until they have to see what the truth is — our government spends far too much and inhibits business growth, and hence economic growth, far too much.

  • “can anyone explain what good it will do for Republicans to oppose tax increases for the rich when that will mean tax increases for everyone?”

    Boehner is hoping the president will blink for some of the aforementioned reasons.

  • Doesn’t the “Fiscal Cliff” include an automatic 10% reduction in government spending across the board? At least that’s what I thought I heard about this back when they were calling it “sequestration” instead of “the fiscal cliff.”

    A 10% reduction in spending across the board might be a good start..

  • SKPeterson

    Boehner needs to come back with a massive spending cut plan eliminating whole departments and substantially curtailing programs in the remainder. He could even propose cuts to Defense and Homeland Security. And then he could tell Obama that there will be no spending increases whatsoever and if he wants a tax increase he can increase the income tax limit to the vaunted 1%.

    I am baffled by the Republican insistence on talking taxes and not talking spending. They should ignore the calls for tax increases and start hammering the President on spending and debt. They also need to eliminate the complete charade of including government expenditures in GDP calculations. If the Republicans lose on this, they need to force Boehner to resign. He’ll have proven himself to be the sort of go along to get along Republican that tap danced in lockstep with the Democrats for the last 40 years and put our country in the financial pickle he’s now to fickle to face. And where is that fiscal genius Paul Ryan I heard about during the last election? Good night, it’s almost as if the maneuvering for position for 2016 is already overshadowing doing anything constructive.

  • rlewer

    It seems that the “fiscal cliff” is the only way to get the budget under control. It raises taxes and cuts spending which is what has to be done since we are more than broke.

    Taxes on the rich will not begin to put a dent in the deficit.

  • reg

    The fiscal cliff raises taxes across the board and cuts spending across the board and both parties will have the cover of saying they didn’t vote for either. It is a win-win for them, even if the country goes into a renewed recession.

  • “can anyone explain what good it will do for Republicans to oppose tax increases for the rich when that will mean tax increases for everyone?”

    They’re betting Obama will blink like he did before. For the sake of the economy, hopefully he will. Even if “the rich” are all like Scrooge McDuck, Miss Prissy, and such, they can hardly do worse at spending money than our “betters” in DC. Solyndra, Chevy Volt, windmills, ethanol……

  • fjsteve

    I can’t wait to have $250,000 of taxable income so I can buy fancy cars and cruise the world in my luxury yachts. I won’t mind paying the additional tax because I will just move around some of my off-shore investments or worse case scenario, maybe I let go of a couple of my staff of servants to make up for it. No skin off my back. I make $250,000 a year.