The facts about the "Fiscal Cliff"
I get annoyed every time I hear those words. I would like to just bitch slap Ben Bernanke in the face for starting that term! I will have to save the topic of Ben Bernanke for a later date though as that topic would just go on and on... and get me really pissed off.
Fiscal Cliff is the term being used to describe the changes in taxes that are set to occur January 1 2013.
The actual changes are the expiration of the Bush tax cut 2 year extension, and the beginning of the first year portion of Obamacare, both passed into law in 2010.
If we "go over the cliff" as our chairman of the Federal Reserve so eloquently puts it, listed below are the larger and most obvious changes that will take effect.
1). Income taxes rates for the average middle class family filing jointly ( married ) will rise from 25% to 31%.
This is deducted by your employer from your paycheck every week. This assumes a joint income above $70k. Well, that doesn't sound like much right...? Assuming a $70k. income, that is a loss of $4,200.00 more per year for your family. I don't know what your situation is but my family has been so happy because we just finished paying off my wife's car... woohoo! The car payment was $350.00 per month. If income taxes increase back to 31% it will be like purchasing a new car! $350 x 12 months equals... $4,200.00. I cant afford a new car right now, how about you?
This is deducted by your employer from your paycheck every week. This assumes a joint income above $70k. Well, that doesn't sound like much right...? Assuming a $70k. income, that is a loss of $4,200.00 more per year for your family. I don't know what your situation is but my family has been so happy because we just finished paying off my wife's car... woohoo! The car payment was $350.00 per month. If income taxes increase back to 31% it will be like purchasing a new car! $350 x 12 months equals... $4,200.00. I cant afford a new car right now, how about you?
By the way, I do not believe in taxing people at different rates depending on how much income they make. This fuels class envy. Obama, Democrats and the liberal progressive media have been fueling that fire with their "old white men" and "the rich need to pay their fair share" comments on a daily basis. Think of it this way, if the government passed a law stating that black people had to sit in the back of the bus or train when they traveled, black people would quickly begin to hate everyone sitting in front of them, and can you blame them? Now in that context... how do you think the people being hit for 35% income tax feel about those paying only 15%?
2). Social Security taxes will rise from the current rate of 4.2% to 6.2%.
Again, if your family is bringing in $70k. in income as an example, you will be paying $1400.00 more per year due to this increase. At this income, at a 6.2% rate, you will be paying our government ( IRS )
$4,340.00 total per year. I want to remind you that this 6.2% is only half the social security tax, your employer has to pay the other 6.2% for having you as an employee. The actual social security tax rate is of course 12.4%. Taxing "the rich" ( employers ) even more does not seem like a good idea to me.
3). Medicare taxes will rise from the current rate of 1.45% to 2.35%.
At $70k. income, you will be paying $630.00 more than you are paying right now. At this new rate your total medicare tax burden will be $1,645.00 instead of $1,015.00.
4). Capital gains taxes will rise from 15% to 21%.
This amount is taken from any profits you have made on the sale of stocks, bonds, property etc.
I do not believe in taxing someone that is investing in the future growth and prosperity of an American company that is already paying high corporate taxes, high income taxes, and employing hundreds of people that also pay high income taxes, high social security taxes, high medicare taxes, high real estate taxes etc. This tax is like punishing someone who is trying to help an American business succeed. I don't know what investments you have but look at your principal investment, then your profits if you have any, remove 21% from your profit and prepare to be pissed off. If you can, take profits now before this tax hits, and do yourself a favor, buy gold. While there is capital gain taxes on gold too, you will make a hell of a lot more money in gold than you will in dollars when the economy finally does crash. And believe me, it is gonna crash soon.
5). Unemployment benefits will be extended... yet again.
Unemployment benefits are paid by your employer as unemployment insurance and last for up to 26 weeks.
It has been extended multiple times now. Some people have been on unemployment for almost 2 years already. Your tax dollars are paying for that. We cannot extend unemployment yet again. These people need to get off their lazy asses and get a job or starve to death. Either way it helps the economy for those of us that are doing far more than their fair share to drive the economy. It would be more beneficial to these lazy bastards and to the American economy to just give out cardboard boxes for these people to live in than give them money, maybe then they would get a job or hell, even start a business god forbid. This welfare, social program crap reminds me of a vacation i took a couple years ago in Utah. What a beautiful state that is. We went and visited some national parks there. I was with my wife and god love her, she had a sandwich in her hands and saw some birds nearby, she wanted to give the birds some bread but there was a sign right there that said " do not feed the animals". The sign said feeding the animals actually hurts the animals because they lose their hunting instinct and become dependant on people feeding them. Well the national park service got it right, now we just need the national Congress to get it right too. Don't feed the goddamn animals!!!
6). Government will start charging health insurance companies an annual fee to conduct business.
They have already started regulating the private health insurance industry.... now more? In 2011, regulations were passed into law stating that health insurance providers cannot spend more than 20% of their total income on things like advertisements, payroll, improvements etc. 80% of the total income of the "private" health insurance provider must be spent on claims. This is sounding really familiar, remember when the government started regulating the housing market and how that turned out? Or how about their continuing efforts to further regulate the energy markets with Cap and Trade? No where in the Constitution is there allowance for the government to regulate a private firms money distribution. I'm starting to get pissed off again... when has government ever done anything efficient financially or logistically? Everything they do that involves money.... they screw it up! Politically correct and fuzzy good feeling ideas do not make for sound and profitable business decisions.
7). government will start charging drug manufacturers an annual fee to conduct business.
See item # 6.
8). The budget deficit as a percentage of GDP will be cut almost in half.
Deficit = government expenditures exceeding incoming revenues.
What?? that doesn't sound right, the government actually cutting spending? That must have been a mistake or concession to get something done in the past.
Oh yeah, that's right i remember now. In July 2011 we had the debt ceiling crisis. The debt ceiling crisis was brought about because government spending had been so out of control that we had reached the limit congress had appropriated as to how much money the U.S Treasury could borrow to pay for government spending. At that time the debt ceiling was 14.3 trillion dollars. That is how much the government has had to borrow to that point to pay for spending on things like, extending unemployment benefits, expansion of the environmental protection agency, expansion of welfare and food stamp programs, expansion of green jobs programs... you get the idea.
So the president and the Democrats controlling the senate majority wanted to raise the debt ceiling further so they could put America even further into debt. The problem was, the Republicans controlled the majority in the house of Representatives. Republicans want to lower our national debt and cut government spending, not increase it. The Democrats proposed raising taxes on the rich to increase revenues. So there was a fierce debate over whether to raise the debt ceiling or force the country into default, forcing huge spending cuts. In the end, Democrats got their wish to raise the debt ceiling up to 16.4 trillion but only if they would agree to amendments written into the bill by Republicans to reduce spending so as to bring the budget deficit down by 50%. These cuts set to begin January 1 2013. As a side note, when the debt ceiling was finally raised, Standard and Poor's reduced Americas credit rating from AAA to AA. The President and Democrats are now, during the current "Fiscal Cliff" debates are saying that they cannot afford to allow those cuts to actually be enacted. Wow, big surprise that is! The Democrats are now fighting to force the Republicans to allow either increased taxes on the rich or allow the fiscal cliff to take place, and blame it on the Republicans in the process. The Republicans have essentially decided to give a "present" or no vote on the Democrats bill to raise taxes on the rich and let whatever the Democrats wish to do with our country's future economy and let them "own" or be blamed for whatever future crisis or problems arise from those decisions.
Ironically, about mid January of 2013, we will again hit the debt ceiling and yet another crisis. This is becoming a pattern with the Democrats, they are like teenagers with a brand new credit card.
We can only hope that the Republicans will do their job to protect our country's future and force the country into default by not raising the debt ceiling yet again, thus forcing the government to cut spending.
This action will cause a lot of economic pain worldwide, but we cannot continue spending like irresponsible teenagers. At some point in the future the market will inevitably crumble on its own and put us in an even worse situation, or we can put the brakes on like responsible adults and deal with the consequences of the situation we have put ourselves in.
Again, if your family is bringing in $70k. in income as an example, you will be paying $1400.00 more per year due to this increase. At this income, at a 6.2% rate, you will be paying our government ( IRS )
$4,340.00 total per year. I want to remind you that this 6.2% is only half the social security tax, your employer has to pay the other 6.2% for having you as an employee. The actual social security tax rate is of course 12.4%. Taxing "the rich" ( employers ) even more does not seem like a good idea to me.
3). Medicare taxes will rise from the current rate of 1.45% to 2.35%.
At $70k. income, you will be paying $630.00 more than you are paying right now. At this new rate your total medicare tax burden will be $1,645.00 instead of $1,015.00.
4). Capital gains taxes will rise from 15% to 21%.
This amount is taken from any profits you have made on the sale of stocks, bonds, property etc.
I do not believe in taxing someone that is investing in the future growth and prosperity of an American company that is already paying high corporate taxes, high income taxes, and employing hundreds of people that also pay high income taxes, high social security taxes, high medicare taxes, high real estate taxes etc. This tax is like punishing someone who is trying to help an American business succeed. I don't know what investments you have but look at your principal investment, then your profits if you have any, remove 21% from your profit and prepare to be pissed off. If you can, take profits now before this tax hits, and do yourself a favor, buy gold. While there is capital gain taxes on gold too, you will make a hell of a lot more money in gold than you will in dollars when the economy finally does crash. And believe me, it is gonna crash soon.
5). Unemployment benefits will be extended... yet again.
Unemployment benefits are paid by your employer as unemployment insurance and last for up to 26 weeks.
It has been extended multiple times now. Some people have been on unemployment for almost 2 years already. Your tax dollars are paying for that. We cannot extend unemployment yet again. These people need to get off their lazy asses and get a job or starve to death. Either way it helps the economy for those of us that are doing far more than their fair share to drive the economy. It would be more beneficial to these lazy bastards and to the American economy to just give out cardboard boxes for these people to live in than give them money, maybe then they would get a job or hell, even start a business god forbid. This welfare, social program crap reminds me of a vacation i took a couple years ago in Utah. What a beautiful state that is. We went and visited some national parks there. I was with my wife and god love her, she had a sandwich in her hands and saw some birds nearby, she wanted to give the birds some bread but there was a sign right there that said " do not feed the animals". The sign said feeding the animals actually hurts the animals because they lose their hunting instinct and become dependant on people feeding them. Well the national park service got it right, now we just need the national Congress to get it right too. Don't feed the goddamn animals!!!
6). Government will start charging health insurance companies an annual fee to conduct business.
They have already started regulating the private health insurance industry.... now more? In 2011, regulations were passed into law stating that health insurance providers cannot spend more than 20% of their total income on things like advertisements, payroll, improvements etc. 80% of the total income of the "private" health insurance provider must be spent on claims. This is sounding really familiar, remember when the government started regulating the housing market and how that turned out? Or how about their continuing efforts to further regulate the energy markets with Cap and Trade? No where in the Constitution is there allowance for the government to regulate a private firms money distribution. I'm starting to get pissed off again... when has government ever done anything efficient financially or logistically? Everything they do that involves money.... they screw it up! Politically correct and fuzzy good feeling ideas do not make for sound and profitable business decisions.
7). government will start charging drug manufacturers an annual fee to conduct business.
See item # 6.
8). The budget deficit as a percentage of GDP will be cut almost in half.
Deficit = government expenditures exceeding incoming revenues.
What?? that doesn't sound right, the government actually cutting spending? That must have been a mistake or concession to get something done in the past.
Oh yeah, that's right i remember now. In July 2011 we had the debt ceiling crisis. The debt ceiling crisis was brought about because government spending had been so out of control that we had reached the limit congress had appropriated as to how much money the U.S Treasury could borrow to pay for government spending. At that time the debt ceiling was 14.3 trillion dollars. That is how much the government has had to borrow to that point to pay for spending on things like, extending unemployment benefits, expansion of the environmental protection agency, expansion of welfare and food stamp programs, expansion of green jobs programs... you get the idea.
So the president and the Democrats controlling the senate majority wanted to raise the debt ceiling further so they could put America even further into debt. The problem was, the Republicans controlled the majority in the house of Representatives. Republicans want to lower our national debt and cut government spending, not increase it. The Democrats proposed raising taxes on the rich to increase revenues. So there was a fierce debate over whether to raise the debt ceiling or force the country into default, forcing huge spending cuts. In the end, Democrats got their wish to raise the debt ceiling up to 16.4 trillion but only if they would agree to amendments written into the bill by Republicans to reduce spending so as to bring the budget deficit down by 50%. These cuts set to begin January 1 2013. As a side note, when the debt ceiling was finally raised, Standard and Poor's reduced Americas credit rating from AAA to AA. The President and Democrats are now, during the current "Fiscal Cliff" debates are saying that they cannot afford to allow those cuts to actually be enacted. Wow, big surprise that is! The Democrats are now fighting to force the Republicans to allow either increased taxes on the rich or allow the fiscal cliff to take place, and blame it on the Republicans in the process. The Republicans have essentially decided to give a "present" or no vote on the Democrats bill to raise taxes on the rich and let whatever the Democrats wish to do with our country's future economy and let them "own" or be blamed for whatever future crisis or problems arise from those decisions.
Ironically, about mid January of 2013, we will again hit the debt ceiling and yet another crisis. This is becoming a pattern with the Democrats, they are like teenagers with a brand new credit card.
We can only hope that the Republicans will do their job to protect our country's future and force the country into default by not raising the debt ceiling yet again, thus forcing the government to cut spending.
This action will cause a lot of economic pain worldwide, but we cannot continue spending like irresponsible teenagers. At some point in the future the market will inevitably crumble on its own and put us in an even worse situation, or we can put the brakes on like responsible adults and deal with the consequences of the situation we have put ourselves in.
