The Fiscal Cliff Approacheth

[Direckshun]

In an effort to make this thread sticky-worthy, I am going to update this OP to keep casual glancers informed.

This post is the official one-stop shopping of the key points/developments of the fiscal cliff negotiations.

Far as I understand, the fiscal cliff:

1. Gets rid of the Bush tax cuts for the wealthy.
2. Gets rid of the Bush tax cuts for everybody else.
3. Slashes defense spending by something like $500 billion.
4. Slashes domestic programs like the NIH, Head Start, and medicine/drug care for the poor by $500 billion.

The new idea is for Democrats to allow the cliff to hit, then immediately introduce a bill that would bring 2, 4, and some of 3 back. But not 1.

Here is a chart detailing exactly what the fiscal cliff is going to do, financially:

Spoiler!

Originally Posted by Direckshun

New CBO projection: if the fiscal cliff hits, we are in another recession, and lose two million jobs.

http://www.reuters.com/article/2012/...87L0JV20120822

The poor would be hurt by the fiscal cliff:

Originally Posted by Direckshun

Overall, if the tax breaks from the 2009 stimulus are allowed to expire—the EITC and Child Tax Credit expansions, along with American Opportunity Credit for college tuition—the poorest 20 percent of Americans would see their taxes go up by $209 on average, reducing their after-tax income by 1.9 percent, according to the Tax Policy Center.

As would the middle class:

Originally Posted by Direckshun

According to estimates by the Tax Policy Center, more than half of all married couples will owe an additional tax of around $4,000 unless Congress acts. And more than a third of families with children will fall subject to the AMT, with parents of three or more children facing an extra tax of $4,700.

Among married couples with at least two children and adjusted gross income between $75,000 and $100,000, the center estimates that 84 percent will face a significantly higher tax bill this year because of the AMT.

There seems to be some consensus between the parties that substantial revenues want to be raised. Boehner and the GOP hopes that's through limiting tax deductions rather than tax raises.

Obama's opening offer, essentially:

• Allow the Bush tax cuts on high earners to expire. $849 billion
• Limit itemized deductions to 28 percent, close some loopholes and deductions on high earners, eliminate tax breaks for oil and gas companies, eliminate the carried interest loophole, plus a few other items. $584 billion
• Create a special "Buffett Rule" tax rate for millionaires. $47 billion
• Restore the estate tax to 2009 levels. $143 billion
• Limit corporate income shifting to low-tax countries. $148 billion
• Other miscellaneous tax increases and reductions. About -$200 billion
• Total: $1.6 trillion

[Direckshun]

[Direckshun]

The CBO estimates that the total effect of these provisions is a 3.9 percent reduction in the growth rate of GDP next year — enough to make the year’s total growth rate negative, plunging the country back into recession.

Go Chiefs.

[Setsuna]

We need to be blitzing our representatives to start caring about us instead of politics.

[patteeu]

It will be worth trashing the economy if we can stick it to those rich guys. /democrats

[FishingRod]

Not to be too obtuse but a 3.9 % reduction in the grown rate. Does that mean 3.9 % of the 2-3% growth rate? That would be about .00117

[ILChief]

Originally Posted by patteeu

It will be worth trashing the economy if we can stick it to those rich guys. /democrats

It will be worth trashing the economy to keep rich people from paying more taxes /republicans

[Amnorix]

Originally Posted by patteeu

It will be worth trashing the economy if we can stick it to those rich guys. /democrats

I think part of the reality here is that the Democrats are trying to get around Grover Norquist and his stupid tax pledge. Once the taxes go up, then the Republicans won't be voting for a tax hike for 2% of the population, they'll be voting for a tax cut for 98%. Assuming they stick to their guns and line this up in advance, they can be ready to go on January 3rd or whatever and the economy won't suffer as everyone will know that this is the deal.

Or perhaps you're right and the Democrats are willing to risk the economy on a philosophical point. Can't imagine where they learned that (hello debt ceiling limit).

[Bewbies]

Here's a reminder about the huge impact of #1, the "Bush tax cuts on the rich."

http://www.chiefsplanet.com/BB/showthread.php?t=258279

[Bewbies]

Originally Posted by Amnorix

I think part of the reality here is that the Democrats are trying to get around Grover Norquist and his stupid tax pledge. Once the taxes go up, then the Republicans won't be voting for a tax hike for 2% of the population, they'll be voting for a tax cut for 98%. Assuming they stick to their guns and line this up in advance, they can be ready to go on January 3rd or whatever and the economy won't suffer as everyone will know that this is the deal.

Or perhaps you're right and the Democrats are willing to risk the economy on a philosophical point. Can't imagine where they learned that (hello debt ceiling limit).

Has there ever been a President elected on the basis he's going to raise taxes? Is this really what he's gonna run on?

[Bewbies]

Originally Posted by ILChief

It will be worth trashing the economy to keep rich people from paying more taxes /republicans

I'm an economic genius /ILCHief

[patteeu]

Originally Posted by ILChief

It will be worth trashing the economy to keep rich people from paying more taxes /republicans

Not true. The Republicans have offered to increase revenues from the higher income brackets based on the model proposed by the Simpson-Bowles commission.

[Direckshun]

Originally Posted by Bewbies

Has there ever been a President elected on the basis he's going to raise taxes? Is this really what he's gonna run on?

Obama ran on the platform of reversing the Bush tax cuts for the wealthiest Americans.

[Bewbies]

Originally Posted by Direckshun

Obama ran on the platform of reversing the Bush tax cuts for the wealthiest Americans.

So raising taxes. Thank you.

[cosmo20002]

Originally Posted by Bewbies

Has there ever been a President elected on the basis he's going to raise taxes? Is this really what he's gonna run on?

The last one I can remember is Barack Obama back in aught-8.