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

[cosmo20002]

Ol' cosmo has been saying for 3 years that they should have let the W tax cuts expire and then introduce the Obama tax cuts retroactive to when the W cuts ended. Are the Rs going to vote against a tax cut for 97% of the people?

[Inspector]

Well, what is the best way to "spread the wealth"?

I heard our president say that during the last campaign. That makes me think he wants to spread other peoples money around.

But I could be wrong, I'm used to that.

[HonestChieffan]

Make sure we raise Dividends and Cap gains on the old folks on fixed incomes. That is easy money there.

[Bewbies]

Originally Posted by cosmo20002

Ol' cosmo has been saying for 3 years that they should have let the W tax cuts expire and then introduce the Obama tax cuts retroactive to when the W cuts ended. Are the Rs going to vote against a tax cut for 97% of the people?

Ol Cosmo also knows that this makes absolutely no difference in our current fiscal situation. But Ol Cosmo doesn't care because the new cuts would be called the Obama tax cuts, and might in some way gain him a few political points in his helpless pursuit of a second term.

[mikey23545]

If only there was some huge group of people that were paying no taxes at all...Now there would be the ones we need to see pay their Fair Share!

[TheLampshade]

Obama didn't run in 2008 on repealing the Bush Tax Cuts-- that issue didn't come to the forefront until 2010.

[Direckshun]

Originally Posted by Bewbies

Ol Cosmo also knows that this makes absolutely no difference in our current fiscal situation. But Ol Cosmo doesn't care because the new cuts would be called the Obama tax cuts, and might in some way gain him a few political points in his helpless pursuit of a second term.

For what it's worth, Obama's already responsible for the single largest tax cut in American history.

[Direckshun]

Originally Posted by TheLampshade

Obama didn't run in 2008 on repealing the Bush Tax Cuts-- that issue didn't come to the forefront until 2010.

Yes, he did.

Well -- he never wanted to repeal all of them. Just the ones for the wealthiest one percent.

[cosmo20002]

Originally Posted by Bewbies

Ol Cosmo also knows that this makes absolutely no difference in our current fiscal situation. But Ol Cosmo doesn't care because the new cuts would be called the Obama tax cuts, and might in some way gain him a few political points in his helpless pursuit of a second term.

Why would it make no dfference? Are you going to tell me that its a drop in the bucket? Just about ANY one thing is a drop in the bucket. You folks saying this are the same ones who go crazy over $10K earmarks.

[cosmo20002]

Originally Posted by mikey23545

If only there was some huge group of people that were paying no taxes at all...Now there would be the ones we need to see pay their Fair Share!

Kids, old people, the unemployed, people with tiny incomes--drop the hammer on 'em!

[cosmo20002]

Originally Posted by TheLampshade

Obama didn't run in 2008 on repealing the Bush Tax Cuts-- that issue didn't come to the forefront until 2010.

Are you kidding?

[Bewbies]

Originally Posted by cosmo20002

Why would it make no dfference? Are you going to tell me that its a drop in the bucket? Just about ANY one thing is a drop in the bucket. You folks saying this are the same ones who go crazy over $10K earmarks.

See my chart I posted before.

[Bewbies]

Originally Posted by Direckshun

For what it's worth, Obama's already responsible for the single largest tax cut in American history.

Obamatax FTW!!

[Dallas Chief]

Originally Posted by 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

You are not being obtuse. It is a valid question. The OP clearly either does not understand the mathematical difference or he is too busy carrying the dems water to answer a very pertinent question.

[FD]

Originally Posted by 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

Its a 3.9 percentage point reduction in growth, so a swing from +2% to -2%, more or less.