U.S. Fiscal Cliff Showdown Turns Into Early Blame Game – Bloomberg.
Now that the election is over and people want their free stuff, it’s time for someone to pay for all that loot! Guess who will foot the bill? You and me, baby!
Congress and Obama are in a battle now over the “fiscal cliff.” Come January 1, 2013, income tax rates go up across the board, the 2% Social Security tax cut expires, and a slew of new taxes to pay for Obamacare go into effect. There are also supposed mandatory budget cuts, but that is all smoke and mirrors. Spending never gets cut. Only the rate of spending increases gets cut, i.e. instead of spending 10% more next year, you only spend 9%. That is considered a cut in Washington.
Both sides are taking hard stances. Congressional republicans want current tax rates to stay where they are across all income levels, and they don’t want a single cut in military spending. Obama wants to keep the current tax rates for “middle class” incomes and raise them for those making $250,000 and up. Obama and the democrats do not want cuts in any entitlement program. Either some compromise deal will get done before 12/31 or we all go over the cliff.
What does this mean for you? If no deal is done, incomes taxes go up for everyone. This is being sold as an expiration of the Bush tax cuts, but that’s disingenuous. In Washington parlance, a tax cut is temporary and a tax hike is permanent. When Bush cut income tax rates, those became the new, standard rate. What democrats want to do is raise income tax rates, plain and simple. To call it anything else is a lie. Your taxes will go up. You will have less money in your pocket next year. That’s fine with democrats, and some republicans. Spending will not get cut. Not one single penny. Yet you will pay more to give free stuff to people who do not earn money or pay taxes. This is charity at the point of a gun.
So what can you do? Make more money… I know that sounds simple and naive, but it’s true. You must try and make more money just to keep up with governments at all levels confiscating more of your money through taxes, fees and regulations. This is on top of trying to stay ahead of the Federal Reserve’s money-printing madness. We are fighting two battles: taxation and monetary inflation.
We are still in a recession. Next year will be worse. I wish I could be more positive about it, but all indicators point towards a further economic downturn. That doesn’t mean you can succeed and achieve your goals. A bum economy is no deterrent to anyone with drive, passion and persistence.
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About Ryan Taylor
