Is the "Fiscal Cliff" that bad??

[bluehenbillk]

Here's my thoughts:

The Fiscal cliff can be summed up I believe into 5 parts:

1- Spending cuts - Well, duh look at our national debt, $16T plus right? We spend too much, of course we need to cut. Maybe not so dramatically in defense but the DOD budget & every other part of the federal government couldn't cut spending by at MINIMUM 5%?? Please, of course they could.

2- Bush tax cuts - Unless both sides are really serious about compromise, and I think we'd all be impressed if they did, Congress is going to watch this temporarily expire, then "cut" taxes on all except those making $250K+, I'm fine with that.

3- Raising the AMT. Well this is a ridiculous idea. It'd push millions of middle-class income earners into paying more taxes, it won't happen so don't sweat it.

4- Payroll tax holiday - I guess I understand why this gets pooled into the fiscal cliff argument, but sorry people, both parties are going to say goodbye to this one. 2% across the board tax increase - we do need more revenue right, or else just add it to the cuts in #1.

#5- Unemployment benefit extensions expire. IMO 52 weeks is more than generous. I think we're paying what 99 weeks currently?

People want to reduce our debt right? A majority of people tend to advocate a balanced budget right? Well that involves 2 things, spending cuts & revenue increases. Do #1, 2(with the proposed change), #4 and #5 and you're on way to accomplishing it.

All I need is about 270-537 other like-minded people in the Beltway & we got this puppy going again.

Who's with me?

[ASUG8]

Some valid points, but you're making the assumption that with guaranteed increased government revenue comes guaranteed belt tightening on the spending side, of which this group of yahoos has failed to convince many people they are capable. I have a little trouble taking on an additional tax burden to continue to pay for stupid programs, more czars, and additional pork barrel spending.

Spending problem > Revenue problem

[GannonFan]

The worse thing that could happen is for them to start issuing small postponements of the fiscal cliff. It's not crazy to think that we'll end up with a negotiated option to push the cliff back to March of 2013 (and they'll say they are doing it so that the new Congress can be seated and then deal with it). Once we realize that we can delay it, I'm sure before March we'll push it back further. And all that does is to repeat the same leaderless, ad hoc policies we've been following for the past 3 years and has led to the kind of uncertainty that most people blame for the stagnation we're in right now. Someone has to make the call and get this done, one way or the other. Bush was a horrible President on many levels, and often his decisiveness worked against him, but there is something to be said for making a decision and running with it. One way or the other, let's jump over the cliff or come up with a permanent solution - standing on the edge and looking over without deciding to do something may be the worst option.

[Ibanez]

I can ASSURE you, that DoD programs have gone ahead and began cutting the waste. Many have begun taking efficiency measures (time, human and cost) to put themselves ahead of the game. Since FY11 my Command has been slowly trimming the budget. Last year projects(and there's hundreds) had to cut 5% for the command to reach its benchmarks of 5%. That is a huge number. My 5% was close $7.5M. Guess what benchmark is now? 23%. To add insult to injury, we're done developing and are going into full rate production. It's difficult but you know what, we've figured out how to keep everyone employed, purchase what we need and survive. We actually cut 17% and received a waiver for the remainder. My point, the DoD has already been cutting, for at least a few years.

Having said that, it's been a great tool to get the Govt adopt new business rules and start running like a business. There are many projects that are not being funded. There are some duplicative (is that even a word?) efforts being consolidated and reduced. If $500B additional cuts are demanded, it's going to be nasty. I'll survive, my work will survive but some people may not be lucky and I know many that won't be.

[GSUhooligan]

Would the tax cut expiration affect 2012 returns or 2013+?

[ASUG8]

Would the tax cut expiration affect 2012 returns or 2013+?

I would think '13 since we started '12 with them in place.

[danefan]

Would the tax cut expiration affect 2012 returns or 2013+?

13 tax year for the personal tax cuts.

There are some corporate tax cuts that already expired but would likely be made retroactive back to 2012 if any tax deal is made.

[Ibanez]

Would the tax cut expiration affect 2012 returns or 2013+?

13 tax year for the personal tax cuts.

There are some corporate tax cuts that already expired but would likely be made retroactive back to 2012 if any tax deal is made.

CNN mentioned expiring Obama tax cuts. Were there some other than the continuation of the Bush tax cuts? I think so and if so, add those to the list of tax cuts that expire

[bluehenbillk]

13 tax year for the personal tax cuts.

There are some corporate tax cuts that already expired but would likely be made retroactive back to 2012 if any tax deal is made.

CNN mentioned expiring Obama tax cuts. Were there some other than the continuation of the Bush tax cuts? I think so and if so, add those to the list of tax cuts that expire

I think they're referring to the payroll holiday tax, which is the social security rollback, that will expire this January 1 & both sides are on record saying they don't intend to keep it.

[danefan]

CNN mentioned expiring Obama tax cuts. Were there some other than the continuation of the Bush tax cuts? I think so and if so, add those to the list of tax cuts that expire

I think they're referring to the payroll holiday tax, which is the social security rollback, that will expire this January 1 & both sides are on record saying they don't intend to keep it.

Correct.

[UD77]

The other item that you missed is the death penalty. I believe currently you can leave a little more than $5MM to your family tax free. It rolls back to $1MM. That may not sound like a big deal to you folks just starting out in the real world of trying to stay ahead but is will be in the future. Anyone that owns a farm would have a hard time passing that farm on to their kids (even if they worked the farm every day). Most likely the kids would have to sell the farm to pay the taxes. Same would be true for a small company. My personal belief is that you should have the right to decide where the various things that you accumulated in life should go when you die. I don't believe that should belong to the government, heck the government tries very hard during your life to keep you from being able to have anything to pass on to your kids.

[danefan]

The other item that you missed is the death penalty. I believe currently you can leave a little more than $5MM to your family tax free. It rolls back to $1MM. That may not sound like a big deal to you folks just starting out in the real world of trying to stay ahead but is will be in the future. Anyone that owns a farm would have a hard time passing that farm on to their kids (even if they worked the farm every day). Most likely the kids would have to sell the farm to pay the taxes. Same would be true for a small company. My personal belief is that you should have the right to decide where the various things that you accumulated in life should go when you die. I don't believe that should belong to the government, heck the government tries very hard during your life to keep you from being able to have anything to pass on to your kids.

The estate tax is a very big issue and one that cannot be left alone.

Whatever the result, there needs to be long-term clarity on what the estate tax will be.

[Ibanez]

I think they're referring to the payroll holiday tax, which is the social security rollback, that will expire this January 1 & both sides are on record saying they don't intend to keep it.

Correct.

Thanks fellas.

[bluehenbillk]

The other item that you missed is the death penalty. I believe currently you can leave a little more than $5MM to your family tax free. It rolls back to $1MM. That may not sound like a big deal to you folks just starting out in the real world of trying to stay ahead but is will be in the future. Anyone that owns a farm would have a hard time passing that farm on to their kids (even if they worked the farm every day). Most likely the kids would have to sell the farm to pay the taxes. Same would be true for a small company. My personal belief is that you should have the right to decide where the various things that you accumulated in life should go when you die. I don't believe that should belong to the government, heck the government tries very hard during your life to keep you from being able to have anything to pass on to your kids.

Good point.

[GannonFan]

The other item that you missed is the death penalty. I believe currently you can leave a little more than $5MM to your family tax free. It rolls back to $1MM. That may not sound like a big deal to you folks just starting out in the real world of trying to stay ahead but is will be in the future. Anyone that owns a farm would have a hard time passing that farm on to their kids (even if they worked the farm every day). Most likely the kids would have to sell the farm to pay the taxes. Same would be true for a small company. My personal belief is that you should have the right to decide where the various things that you accumulated in life should go when you die. I don't believe that should belong to the government, heck the government tries very hard during your life to keep you from being able to have anything to pass on to your kids.

The counter point to that, of course, is why should your kids be given that extra leg up on other kids just because their parents had a lot of success or money. Obviously kids with a bigger inheritence (or any inheritence) will have a better starting point in life than those that didn't. Why is that fair? I'm not particularly an advocate of that train of thought, but the ability of rich people to pass along their wealth to their progeny does have the impact of setting those kids up to succeed versus their contemporaries who don't have as successful parents.

[CAA Flagship]

The other item that you missed is the death penalty. I believe currently you can leave a little more than $5MM to your family tax free. It rolls back to $1MM. That may not sound like a big deal to you folks just starting out in the real world of trying to stay ahead but is will be in the future. Anyone that owns a farm would have a hard time passing that farm on to their kids (even if they worked the farm every day). Most likely the kids would have to sell the farm to pay the taxes. Same would be true for a small company. My personal belief is that you should have the right to decide where the various things that you accumulated in life should go when you die. I don't believe that should belong to the government, heck the government tries very hard during your life to keep you from being able to have anything to pass on to your kids.

The counter point to that, of course, is why should your kids be given that extra leg up on other kids just because their parents had a lot of success or money. Obviously kids with a bigger inheritence (or any inheritence) will have a better starting point in life than those that didn't. Why is that fair? I'm not particularly an advocate of that train of thought, but the ability of rich people to pass along their wealth to their progeny does have the impact of setting those kids up to succeed versus their contemporaries who don't have as successful parents.

Fair? Life is not fair.
But taxing money that has already been taxed when it is being transferred without a return of goods or services is probably not a good thing.

[GannonFan]

The counter point to that, of course, is why should your kids be given that extra leg up on other kids just because their parents had a lot of success or money. Obviously kids with a bigger inheritence (or any inheritence) will have a better starting point in life than those that didn't. Why is that fair? I'm not particularly an advocate of that train of thought, but the ability of rich people to pass along their wealth to their progeny does have the impact of setting those kids up to succeed versus their contemporaries who don't have as successful parents.

Fair? Life is not fair.
But taxing money that has already been taxed when it is being transferred without a return of goods or services is probably not a good thing.

And yet we live in an era where people are actually talking about taxing wealth and not income. In the political world right now, rich people are the enemy. Don't see that changing anytime soon.

[ASUG8]

The other item that you missed is the death penalty. I believe currently you can leave a little more than $5MM to your family tax free. It rolls back to $1MM. That may not sound like a big deal to you folks just starting out in the real world of trying to stay ahead but is will be in the future. Anyone that owns a farm would have a hard time passing that farm on to their kids (even if they worked the farm every day). Most likely the kids would have to sell the farm to pay the taxes. Same would be true for a small company. My personal belief is that you should have the right to decide where the various things that you accumulated in life should go when you die. I don't believe that should belong to the government, heck the government tries very hard during your life to keep you from being able to have anything to pass on to your kids.

The counter point to that, of course, is why should your kids be given that extra leg up on other kids just because their parents had a lot of success or money. Obviously kids with a bigger inheritence (or any inheritence) will have a better starting point in life than those that didn't. Why is that fair? I'm not particularly an advocate of that train of thought, but the ability of rich people to pass along their wealth to their progeny does have the impact of setting those kids up to succeed versus their contemporaries who don't have as successful parents.

Why should the government get a windfall simply because someone was successful in their life, passed away, then you penalize their progeny for their parent's success? If I had kids I'd want to set them up as well as possible whether it means I have to structure inheritance payouts at certain ages, etc. to keep them from being idiots - I just don't understand why the government should be reaping the successes after a person's death when they were reaping them through taxation throughout a person's life.

[ASUG8]

Fair? Life is not fair.
But taxing money that has already been taxed when it is being transferred without a return of goods or services is probably not a good thing.

And yet we live in an era where people are actually talking about taxing wealth and not income. In the political world right now, rich people are the enemy. Don't see that changing anytime soon.

And yet 90% of Americans aspire to be wealthier. Jealousy abounds for those who have already reached a higher level of wealth, whether it was earned or inherited.

[AZGrizFan]

The counter point to that, of course, is why should your kids be given that extra leg up on other kids just because their parents had a lot of success or money. Obviously kids with a bigger inheritence (or any inheritence) will have a better starting point in life than those that didn't. Why is that fair? I'm not particularly an advocate of that train of thought, but the ability of rich people to pass along their wealth to their progeny does have the impact of setting those kids up to succeed versus their contemporaries who don't have as successful parents.

Why should the government get a windfall simply because someone was successful in their life, passed away, then you penalize their progeny for their parent's success? If I had kids I'd want to set them up as well as possible whether it means I have to structure inheritance payouts at certain ages, etc. to keep them from being idiots - I just don't understand why the government should be reaping the successes after a person's death when they were reaping them through taxation throughout a person's life.

Me thinks GannonFan is simply playing devil's advocate here.

[ASUG8]

Why should the government get a windfall simply because someone was successful in their life, passed away, then you penalize their progeny for their parent's success? If I had kids I'd want to set them up as well as possible whether it means I have to structure inheritance payouts at certain ages, etc. to keep them from being idiots - I just don't understand why the government should be reaping the successes after a person's death when they were reaping them through taxation throughout a person's life.

Me thinks GannonFan is simply playing devil's advocate here.

I know, but I didn't really think the counterpoint had legs.....

[DSUrocks07]

Me thinks GannonFan is simply playing devil's advocate here.

I know, but I didn't really think the counterpoint had legs.....

It doesn't really, but people are simple-minded enough to believe it.

[AZGrizFan]

Me thinks GannonFan is simply playing devil's advocate here.

I know, but I didn't really think the counterpoint had legs.....

Yet 50.8% of the population believes EXACTLY that.