Failure to extend tax cuts could head us ... Off a Fiscal Cliff
October 03, 2012 01:22 AM | 2021 views | 6 6 comments | 6 6 recommendations | email to a friend | print
President Barack Obama and his Democratic supporters have consistently called for new and higher taxes to help balance the budget. But there was a dire warning on Monday that such a course would take the country — and many Cobb County residents — over the fiscal cliff.

A study by the Tax Policy Center in Washington, D.C., warned that the typical middle-income family making between $40,000 to $64,000 a year — a spread that encompasses Cobb’s median income — would see its taxes rise by up to $2,000 next year if congressional lawmakers fail to renew the many tax cuts that are now set to expire at year’s end.

Heading that list are the so-called “Bush tax cuts.” Unless they are renewed, a married couple would pay a 28 percent rate on taxable income that exceeds $72,300. At present they pay a 25 percent rate. And what is now a 10 percent tax rate paid on the first $8,900 of income would rise to 15 percent.

All together, if the various tax cuts are not renewed, the country would see a 5 point rise in its average tax rate, meaning a 4 percentage point tax jump for most of those earning less than $100,000 per year. And as for those in the $40,000 to $64,000 range referred to above, they would see their average federal tax rate soar to 17.8 percent from 14 percent. That would translate to an overall increase of 27 percent in their federal tax bill.

Nearly 90 percent of households across the country would see their taxes go up.

Also slated to expire is the 2 percent temporary cut in payroll taxes that was pushed by Obama.

“The fiscal cliff threatens an unprecedented tax increase at year end,” wrote the authors of the Tax Policy Center report. “Taxes would rise by more than $500 billion in 2013 — an average of almost $3,500 percent household — as almost every tax cut enacted since 2001 would expire.”

If the cuts do expire, that would mean an estimated $500 billion in additional revenue to the federal government. And if there was any guarantee that that ocean of new money would be used to help balance the budget and reduce the size of the national debt, it might almost be worth letting them expire.

But sad experience tells us that Congress — no matter which party controls Capitol Hill — will find a way to spend every last dollar we send its way.

As President Ronald Reagan was fond of saying, “Washington doesn’t have a revenue problem, it has a spending problem.”

That is as true now as it was then. And the best way of ensuring that as much of your hard-earned dollars stay in your pocket rather than being siphoned off toward Washington is for Congress to ensure the tax cuts in question stay in place and are made permanent.

Comments
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I Won't vote GOP
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October 04, 2012
Obama inherited two wars, a stock market that had (almost) crashed, the automakers were broke, we were being overrun with illegal immigration and the list could go on and on. Washington was in a real mess when Obama took office. Obama realizes we shouldn't bankrupt our children and grandchildren to give tax breaks to the rich.

I won't be voting for the GOP, especially since Tim Lee and the local GOP have stuck it to the citizens and employees of Cobb County.
Kevin Foley
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October 03, 2012
And the GOP-led House adjourned until after the election after just 4 weeks.
Ole Man
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October 03, 2012
And the Democratic controlled Senate has not passed a budget in over 3 years.
VFP42
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October 03, 2012
If the cuts do expire, that would mean an estimated $500 billion in additional revenue to the federal government?

But Mitt and Romney say lowering tax rates increases revenue throught a broader tax base.

Which is it?

If this is a "cliff" why did Dubya create it? Why did he set these cuts to expire? If he was just interested in forcing a review, why didn't he set them to DOUBLE instead? Funny how they expired during Obama's term.. It wasn't a Rove setup for the non-Republican President was it?

WOuld Rove play with all of us to score some political points? Of course he would! And Rove owns Mitt and Ryan just like he owned DUbya.

If you want Rove in as President again, vote for Mitt and schedule

A: Some new fiscal cliffs to happen in a few years

B: Yet another Halliburton contract: War on Iran

C: The end of your mortgage deduction and your subseuquent becoming a renter
Jud retired
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October 03, 2012
Who is Dubya? I must be Dubya too?
Devlin Adams
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October 03, 2012
You mean like George Soros owns the sock puppet Barack Obama, whose Presidency he bought and paid fo?
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