The start of a new year is arguably no time to be cynical - what with new resolve and a positive attitude, anything is possible. And we're not. We love fields of flowers and little bunny rabbits and cute babies just like your average self-delusional middle class tax payer.
But, well, let's just say that the extraordinary 166 point rise in the Dow Industrial stock market average about 10 hours before a Fiscal Cliff deal was announced did, uh, catch our attention.
What does this mean? Did someone actually know something before everyone else? Is it conceivable that this deal has been in place for days, if not weeks, but final resolution was postponed or surrounded, in Winston Churchill's apt phrase, by a 'bodyguard of lies' because the truth was so valuable that releasing it too early might have scuttled the deal? Well, sure. And if true, we're frankly relieved to hear it.
We're relieved because, if true, it means that some semblance of self-interested sanity has finally begun to overcome the years of ideological constipation that have thwarted attempts at economic recovery and renewal.
The details of the deal, as reported below, suggest the business wing of the Republican party - that wing that pays the bills - got its point across weeks ago: a deal with modest tax increases is better than no deal at all. The Tea Party wing, that which provides ideological fervor and brooks no compromise (unless there is something in it for them personally as in former Tea Party founder Dick Armey's $40 million buy-out)is no doubt outraged by what they will perceive is a traitorous abandonment of principle.
So, the fact that the Senate agreed overwhelmingly on the outlines of a deal is good news. The more ideological House, is making no promises. The pressure from both sides - for and against a deal - is going to be intense. Another telling measure, however, is that a number of those 8 who voted against the compromise in the Senate were Democrats who felt that too much was being surrendered.
Either way, it would be premature to suggest that fiscal sanity has been achieved. But at least it is on the table and can be discussed intelligently. For now, that may have to be enough. JL
Ginger Gibson reports in Politico:
A deal to avert the fiscal cliff has begun to take shape. While the details of the deal can always change as legislation moves through each chamber, here’s what we know at this point: Income taxes: An increase to a 39.6 percent for individuals making more than $400,000 a year and families making more than $450,000. The previous for those earners was 35 percent.
Payroll tax: The small cut in the Social Security tax for all earners will be allowed to expire.
Alternative minimum tax: A permanent patch to keep more Americans from being subject to the increased tax level, which would have affected an estimated 30 million taxpayers next year.
Dividends and capital gains: Taxed at 20 percent for individuals making at least $400,000 and $450,000 for families.
PEP and Pease deduction caps: The Personal Exemption Phase-out will be reinstated with a starting threshold for those making $250,000. The “Pease” deduction will be reinstated for those making $300,000 or more. Under former President George W. Bush, these deduction caps were suspended.
Estate tax: The estate tax will have a $10 million exemption per a couple with additional inheritance taxed at 40 percent.
Unemployment benefits: Additional benefits for the long-term unemployed are extended through the end of 2013. Those benefits expired on Friday.
Business tax credits: Tax credits for businesses, including Research and Experimentation Tax Credit and the Production Tax Credit, are extended through the end of 2013.
Stimulus tax credits: A five-year extension of tax credits largely used by lower- and middle-class workers that were expanded as part of the stimulus, including the Child Tax Credit, Earned Income Tax Credit and college tuition tax credit.
“Doc fix”: Stops a 27 percent reduction in payments to Medicare providers using spending cuts as offsets.
Sequester: The sequester will be delayed by two months and replaced with new half revenues and half targeted spending cuts.
0 comments:
Post a Comment