Tax hike in perspective

[HI54UNI]

Obviously tax rates aren't high enough.

[Ivytalk]

That's too uncomplicated a graph for JellyBelly.

[AZGrizFan]

Should put the budget "cuts" in perspective to that graph. WAFJ.

[OL FU]

I was reading one of the news sources (can't remember which one) and they were discussing the house's potential vote to avert the fiscal cliff and I realized that this is one of the biggest problems with our world view. The press is stupid. This is a vote isn't to fix the fiscal cliff. it is to maintain the status quo (with a tweak or two)

[CitadelGrad]

The tax hikes equate to three weeks of Fed debt monetization.

Thank you, President Obama, you retarded motherfucker.

[JoltinJoe]

So the Bush tax cuts were made permanent for about 99% of the population. And the president is still going to have to face brutal negotiations over deficit reduction when he asks for an increase in the federal debt limit in about two months.

How is this not a Republican win?

I thought the president and the media overplayed his perceived leverage right out of the box in these negotiations. And I don't think the president saying that he will not tolerate negotiations over "paying for the cost resulting from laws already passed by the congress" is an accurate assessment of his leverage in the upcoming discussions over the federal deficit.

[kalm]

So the Bush tax cuts were made permanent for about 99% of the population. And the president is still going to have to face brutal negotiations over deficit reduction when he asks for an increase in the federal debt limit in about two months.

How is this not a Republican win?

I thought the president and the media overplayed his perceived leverage right out of the box in these negotiations. And I don't think the president saying that he will not tolerate negotiations over "paying for the cost resulting from laws already passed by the congress" is an accurate assessment of his leverage in the upcoming discussions over the federal deficit.

To quote my hero Dick Cheney..."Reagan proved deficits don't matter", and we still have yet to find out whether or not that's a true statement. Average americans felt a little crunch at the bottom of this recession and they didn't like it, but most of that was uncertainty and fear. What matters to most americans is wages (jobs) and protecting their own standard of living, which raising the debt ceiling accomplishes. The question is whether this is right or wrong. It's pretty much the same old argument over Keynesianism.

Given current monetary policy, I just wish people would quit equating government budgets to businesses and households. Governments can and have grown economies out of downturns (just ask Cheney ) I'm not saying there isn't a price to be paid for that, but we haven't seen it yet.

[houndawg]

The tax hikes equate to three weeks of Fed debt monetization.

Thank you, President Obama, you retarded motherfucker.

And thank you for sending a bunch of pussies to negotiate.


The party of paper-tiger windbags. Buh-bye Boener....

[kalm]

Oh...and one more thing. We're not Greece either.

[Ivytalk]

Oh...and one more thing. We're not Greece either.

That's right. We make better baklava than they do.

[CAA Flagship]

Oh...and one more thing. We're not Greece either.

Not yet, but we are getting closer by the hour.

[danefan]

Here's a good summary of what the bill did to taxes:

• • Raises the top tax rate to 39.6% for married couples earning $450,000; single taxpayers earning $400,000. These amounts will be indexed for inflation.
  • Raises long-term capital gains and qualifying dividends tax rate to 20% (from 15%) for taxpayers in the 39.6% tax bracket for regular and alternative minimum tax.
  • Permanently extends Bush-era tax cuts from 2001 and 2003 for all other taxpayers.
  • Reinstates phaseout of personal exemptions and overall limitation on itemized deductions for married couples filing jointly earning over $300,000 and single taxpayers earning over $250,000.
  • Raises the maximum estate tax rate to 40% but keeps the exemption amount at $5 million, adjusted for inflation.
  • Extends for 5 years (through 2018) the American Opportunity Tax Credit to pay for higher education, and special relief for families with 3 or more children for the refundable portion of the child tax credit and increased percentage for the earned income tax credit.
  • Patches the AMT for 2012 and adjusts the exemption amount for inflation going forward.
  • Extends through 2013 the following individual tax benefits: above the line deduction for teacher expenses, relief from cancellation of debt income for principal residences, parity for employer-provided mass transit benefits, deduction for mortgage insurance premiums as interest, election to deduct state and local sales taxes in lieu of income taxes, above the line deduction for qualified education expenses, tax-free distributions from IRA accounts for charitable purposes.
  • Extends through 2013 certain business tax provisions that expired at the end of 2011 including: the research credit, the new markets tax credit, railroad track maintenance credit, mine rescue team training credit, work opportunity credit, the Section 179 asset expensing at $500,000, Section 1202 stock exclusion at 100%, and empowerment zone incentives.
  • Extends 50% bonus depreciation through 2013.
  • Extends through 2013 certain energy tax incentives that expired at the end of 2011 including: energy efficient credit for existing homes, alternative fuel vehicle refueling property credit, biodiesel and renewable diesel incentives, wind credit, energy efficient credit for new homes, and credit for manufacture of energy efficient appliances.

[kalm]

Oh...and one more thing. We're not Greece either.

Not yet, but we are getting closer by the hour.

No we are not.

[JohnStOnge]

Not yet, but we are getting closer by the hour.

No we are not.

Elaborate. Obviously no two circumstances are identical. And I've seen articles by people attempting to argue that the European entitlement state approach is not a factor in the cracks starting to appear across the sea. But what, in your mind, protects us from having a scenario similar to what's happening in Greece happen over here?

[ASUMountaineer]

Obviously tax rates aren't high enough.

Well, at least the Dems can claim victory for solving the financial crisis. Clearly a return to Clinton-era tax rates for the rich will make Washington flush with enough capital to pay down the debt and provide us all with champagne and caviar dreams!

All sarcasm aside, the GOP leadership is woefully inept and this deal is POS. How much better does Simpson-Bowles look to Conks now? WAFJ!

[kalm]

No we are not.

Elaborate. Obviously no two circumstances are identical. And I've seen articles by people attempting to argue that the European entitlement state approach is not a factor in the cracks starting to appear across the sea. But what, in your mind, protects us from having a scenario similar to what's happening in Greece happen over here?

And obviously there are some similarities. But to use some of the same logic that I heard when I posted about Iceland's turn around...Greece has a much smaller economy...for starters. When compared to us, they have no land to speak of, very few natural resources, the leverage we have, and their economy is entangled with EU. A better comparison might be comparing Greece to California. Those are just a few quick examples of the differences.

And we don't take siestas.

[CitadelGrad]

Oh...and one more thing. We're not Greece either.

That's true. Germany won't bail our asses out.

[BDKJMU]

Here's a good summary of what the bill did to taxes:

• • Raises the top tax rate to 39.6% for married couples earning $450,000; single taxpayers earning $400,000. These amounts will be indexed for inflation.
  • Raises long-term capital gains and qualifying dividends tax rate to 20% (from 15%) for taxpayers in the 39.6% tax bracket for regular and alternative minimum tax.
  • Permanently extends Bush-era tax cuts from 2001 and 2003 for all other taxpayers.
  • Reinstates phaseout of personal exemptions and overall limitation on itemized deductions for married couples filing jointly earning over $300,000 and single taxpayers earning over $250,000.
  • Raises the maximum estate tax rate to 40% but keeps the exemption amount at $5 million, adjusted for inflation.
  • Extends for 5 years (through 2018) the American Opportunity Tax Credit to pay for higher education, and special relief for families with 3 or more children for the refundable portion of the child tax credit and increased percentage for the earned income tax credit.
  • Patches the AMT for 2012 and adjusts the exemption amount for inflation going forward.
  • Extends through 2013 the following individual tax benefits: above the line deduction for teacher expenses, relief from cancellation of debt income for principal residences, parity for employer-provided mass transit benefits, deduction for mortgage insurance premiums as interest, election to deduct state and local sales taxes in lieu of income taxes, above the line deduction for qualified education expenses, tax-free distributions from IRA accounts for charitable purposes.
  • Extends through 2013 certain business tax provisions that expired at the end of 2011 including: the research credit, the new markets tax credit, railroad track maintenance credit, mine rescue team training credit, work opportunity credit, the Section 179 asset expensing at $500,000, Section 1202 stock exclusion at 100%, and empowerment zone incentives.
  • Extends 50% bonus depreciation through 2013.
  • Extends through 2013 certain energy tax incentives that expired at the end of 2011 including: energy efficient credit for existing homes, alternative fuel vehicle refueling property credit, biodiesel and renewable diesel incentives, wind credit, energy efficient credit for new homes, and credit for manufacture of energy efficient appliances.

That list appears to be wrong about that. According to Bloomberg, it goes from 15% to 23.8%:
"...The top tax rates on capital gains and dividends would go up to 23.8 percent, from 15 percent last year...."
http://www.bloomberg.com/news/2013-01-0 ... holds.html" onclick="window.open(this.href);return false;

[Pwns]

WAFJ...even if the highest marginal tax rate was 100% and it didn't change anyone's behavior then you still wouldn't close the budget gap.

[danefan]

Here's a good summary of what the bill did to taxes:

• • Raises the top tax rate to 39.6% for married couples earning $450,000; single taxpayers earning $400,000. These amounts will be indexed for inflation.
  • Raises long-term capital gains and qualifying dividends tax rate to 20% (from 15%) for taxpayers in the 39.6% tax bracket for regular and alternative minimum tax.
  • Permanently extends Bush-era tax cuts from 2001 and 2003 for all other taxpayers.
  • Reinstates phaseout of personal exemptions and overall limitation on itemized deductions for married couples filing jointly earning over $300,000 and single taxpayers earning over $250,000.
  • Raises the maximum estate tax rate to 40% but keeps the exemption amount at $5 million, adjusted for inflation.
  • Extends for 5 years (through 2018) the American Opportunity Tax Credit to pay for higher education, and special relief for families with 3 or more children for the refundable portion of the child tax credit and increased percentage for the earned income tax credit.
  • Patches the AMT for 2012 and adjusts the exemption amount for inflation going forward.
  • Extends through 2013 the following individual tax benefits: above the line deduction for teacher expenses, relief from cancellation of debt income for principal residences, parity for employer-provided mass transit benefits, deduction for mortgage insurance premiums as interest, election to deduct state and local sales taxes in lieu of income taxes, above the line deduction for qualified education expenses, tax-free distributions from IRA accounts for charitable purposes.
  • Extends through 2013 certain business tax provisions that expired at the end of 2011 including: the research credit, the new markets tax credit, railroad track maintenance credit, mine rescue team training credit, work opportunity credit, the Section 179 asset expensing at $500,000, Section 1202 stock exclusion at 100%, and empowerment zone incentives.
  • Extends 50% bonus depreciation through 2013.
  • Extends through 2013 certain energy tax incentives that expired at the end of 2011 including: energy efficient credit for existing homes, alternative fuel vehicle refueling property credit, biodiesel and renewable diesel incentives, wind credit, energy efficient credit for new homes, and credit for manufacture of energy efficient appliances.

That list appears to be wrong about that. According to Bloomberg, it goes from 15% to 23.8%:
"...The top tax rates on capital gains and dividends would go up to 23.8 percent, from 15 percent last year...."
http://www.bloomberg.com/news/2013-01-0 ... holds.html" onclick="window.open(this.href);return false;

The list I posted is from Bloomberg - its an email notice to tax professionals and I just re-read the actual bill which reads 20% not 23.8%.

[JohnStOnge]

I wonder. If going deeper and deeper into debt does not matter, why is it that we need to collect taxes at all? And I'm being serious. Why is it that we can't just say, "Government issues money. Government, or the pseudo governmental Federal Reserve, can just estimate how much money is needed in circulation at any given time and create money as necessary."

In fact, why even have the concept of the government borrowing money? Government just issues money as necessary to serve as a medium of exchange so people can pay each other for goods and services. No taxation at all. Government just generates money to pay people for what it needs.

Why not?

[BDKJMU]

That list appears to be wrong about that. According to Bloomberg, it goes from 15% to 23.8%:
"...The top tax rates on capital gains and dividends would go up to 23.8 percent, from 15 percent last year...."
http://www.bloomberg.com/news/2013-01-0 ... holds.html" onclick="window.open(this.href);return false;

The list I posted is from Bloomberg - its an email notice to tax professionals and I just re-read the actual bill which reads 20% not 23.8%.

Why is Bloomberg reporting both 20% in one article and 23.8% in another? And why other outlets reporting that the top rate will rise to 23.8%?

[danefan]

The list I posted is from Bloomberg - its an email notice to tax professionals and I just re-read the actual bill which reads 20% not 23.8%.

Why is Bloomberg reporting both 20% in one article and 23.8% in another? And why other outlets reporting that the top rate will rise to 23.8%?

No clue. Read the bill yourself...

http://www.gpo.gov/fdsys/pkg/BILLS-112h ... hr8eas.pdf" onclick="window.open(this.href);return false;

Sec. 102 deals with the cap gains rates.

[HI54UNI]

The list I posted is from Bloomberg - its an email notice to tax professionals and I just re-read the actual bill which reads 20% not 23.8%.

Why is Bloomberg reporting both 20% in one article and 23.8% in another? And why other outlets reporting that the top rate will rise to 23.8%?

Isn't there some additional Medicare tax in Obamacare on top of the capital gains for high earners? I think it might be that 3.8% but I could be wrong.

[danefan]

Why is Bloomberg reporting both 20% in one article and 23.8% in another? And why other outlets reporting that the top rate will rise to 23.8%?

Isn't there some additional Medicare tax in Obamacare on top of the capital gains for high earners? I think it might be that 3.8% but I could be wrong.

Makes sense. The 3.8% tax is actually on net investment income (broader than just cap gains) and it also has a lower thresshold ($250k family, $200k single).

I wouldn't have reported that amount together as they are separate basis for calculation, but that has to be where the 3.8% is coming into play.