Tuesday, January 1, 2013

No Cliff Hanger Afterall

I have to say, I'm not sure how to feel about the so-called "fiscal cliff" agreement. As someone pretty far to the left, I have to drag my pragmatic side out of the moth balls once in a while. Here's what's been rolling through my brain:

I'm not particularly concerned that the agreement went from income above $250K to $400K on individuals. Would I have preferred the $250K?. Sure. However, we got personal exemptions knocked back to those making above $250K. The estate tax was a joke. Republicans won. Their top rate went from 35% to 40%, after the first $5M. Big whoop. Capital gains and dividends went from 15% to 20%. Another GOP win. They were set to go back to 39.6% The alternative minimum tax was a Democratic win. The middle class is protected from getting jacked on it moving forward. It was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes. We do have a five year extension on expansions of the child tax credit, the earned income tax credit, and an up-to-$2,500 tax credit for college tuition. Also extended for one year is the accelerated "bonus" depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity. Long term unemployed got a one year extension, which was one I was concerned about. I guess it's a win for Democrats, but not a strong one as we'll still have a GOP led House a year from now. I'm not unemployed, however if you can't find a job, you end up on the street. The GOP thinks someone who lost a $75K per year job should just pick up a couple shifts at Walmart or McDonalds and all their problems will be solved. Well, not if you have a mortgage. The Social Security payroll tax cut is a short term loss for workers, but at the same time, if we're not paying in now, it won't be there when we retire. And no, I don't believe for a minite Social Security is in trouble. It's biggest problem is that's where most of our borrowing has come from and the DC politicians do not want to pay it back...excluding Bernie Sanders.

Here's what I really don't like. Democrats did not get the debt ceiling raised in this deal...for at least two years. We are going to be going through all this baloney again in 2 or 3 months. President Obama says he will not negotiate with the hostage takers again, but his track record says otherwise. We'll see soon enough. I was actually ok with going over the cliff as it was the only way to cut the damn over-bloated military budget. Now we're going to have to listen to Republicans, led by John McCain and Lindsay Graham insist that the military can not be touched , but we need to decimate Social security and Medicare. I'm worried about wobbly kneed Democrats buying into it.

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