At the 11th hour, Senate Republicans voted on a 157 page bill that they hadn't read, all in a rush to avert a tax increase to Clinton-era levels on everyone. The terms of the bill, at least according to the summary put forth by WaPo:
-Tax rates will permanently rise to Clinton-era levels for families with income above $450,000 and individuals above $400,000. all income below the threshold will permanently be taxed at Bush-era rates.
—The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It remain at 15 percent for everyone else.
—The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation, as a concession to Republicans and some Democrats to rural areas like Sen. Max Baucus (D-Mt.).
—The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, spilt between defense and non-defense. The other half will be offset revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over.
—The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class.
—The deal will not address the debt-ceiling, and the payroll tax holiday will be allowed to expire.
—Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.
So what will the new tax structure look like, between the Senate Bill and Obamacare:
Would that that were all in this crap sandwich - but to add true insult to injury, Senate Republicans agreed to allow some of the most egregious tax give aways as part of the bill. Specifically, the "wind tax credit survived (cost: $12.1 billion), and so did the tax breaks for cellulosic ethanol ($59 million) and the impoverished producers of Hollywood ($248 million)." Spending is truly threatening the health of our nation, and these give aways should be at the top of the list of cuts. Instead, Republicans vote for a deal that includes them. These idiots do not represent the interests of the conservative side of the aisle.
This 'deal' was virtually all about raising taxes. "According to the Congressional Budget Office, the last-minute fiscal cliff deal . . . cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts."
The tax increases "on the rich," including earned income, capital gains and the death tax are pure class warfare. As such, they are a symbolic victory for the progressive left, but are also large enough that they will have practical effect. The increases raise less revenue than projected and, more importantly, they will reduce our already anemic growth both by lessening capital in the private sector, and in particular, reducing it amongst the class that we rely upon to create businesses and jobs. And with the 2012 reelection of Obama and a Democrat controlled Senate, they were inevitable. This is the Dem plan to tax us to prosperity.
There has not yet been a principled Republican response. Instead, we have a fractured, frantic and seemingly leaderless Republican caucus that is scrambling to accept a deal on wholly Democrat terms. This is just sad.
Thomas Sowell, in his most recent column, opined that Republicans deserved to lose the 2012 election. Professing his mystification at how Republicans "can keep repeating the same mistakes for decades on end" he identifies the problem as a Republican establishment that "still goes for pragmatic moderates who feed pablum to the public, instead of treating them like adults." Then he gets to the heart of it all:
It is not just Republican presidential candidates who cannot be bothered to articulate a coherent argument, instead of ad hoc talking points. Have you yet heard House Speaker John Boehner take the time to spell out why Barack Obama’s argument for taxing “millionaires and billionaires” is wrong?
It is not a complicated argument. Moreover, it is an argument that has been articulated many times in plain English by conservative talk-show hosts and by others in print. It has nothing to do with being worried about the fate of millionaires or billionaires, who can undoubtedly take care of themselves.
What we all should be worried about are high tax rates driving American investments overseas, when there are millions of Americans who could use the jobs that those investments would create at home.
Yet Obama has been allowed to get away with the emotional argument that the rich can easily afford to pay more, as if that is the issue. But it will be the issue if no one says otherwise.