About Those Tax Hikes

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I need to say up front that I would have voted for the debt ceiling bill that was passed.  Conservatives simply do not currently have the power to pass a bill that would seriously cut spending.  There is an entrenched political class in Washington (made up of members of both parties), and until the offenders are voted out, there will be no serious progress made on spending or the debt.  I think term limits are a really good idea, and the debate we have seen in recent weeks confirms that thought for me. 

That having been said, I want to talk about tax hikes in the near and distant future.  The 'Bush tax cuts' expire in December of 2012, and the new taxes to pay for Obamacare begin in January 2013.  Notice that both these things happen after the November 2012 election.  The expiration of the 'Bush tax cuts' is expected to add between $3000 and $4000 a year to the tax burden of the average American family (Fox News October 11, 2010).  The Obamacare taxes will include higher payroll taxes, payroll taxes on investment income, and higher taxes on 'rich' Americans making $250,000.  The taxes on 'rich' Americans are not indexed for inflation, so it is very possible that people struggling to feed their families and pay their mortgages may soon be considered 'rich.'  Most economists predict a severe economic slowdown as a result of these taxes.

It gets better.  Hot Air reported yesterday that it looks like the Super Committee which will be formed as a result of the debt ceiling agreement will be able to raise taxes. 

Hot Air reports:

"Remember yesterday's GOP talking point about how "baseline budgeting" would make it virtually impossible for the Committee to impose tax hikes? Supposedly, because CBO is required to assume that the Bush tax cuts will lapse next year, the $3.5 trillion in new revenue that will come from that lapse is already part of the Committee's "baseline." In order for them to hit their target of $1.5 trillion in additional savings, they'd have to recommend tax hikes above and beyond that $3.5 trillion. Which, with an election coming up, they surely aren't going to do."

Well, evidently that statement has already expired.  The article further reports:

"Former Bush econ advisor Keith Hennessey seems to think that the baseline will govern Committee action on tax rates but won't affect their ability to raise taxes through other means, like closing loopholes. Assuming Tapper's correct, though, not only will the Committee spend the next three months bickering about where to find savings, they'll be bickering about what standard should be used to measure whether a new spending cut or revenue-raiser qualifies as a "savings" in the first place. Which means the GOP is caught between tax increases from the Super Committee, the expiration of the Bush tax cuts next year if the Committee does nothing about revenues, and sharp cuts to defense if Congress doesn't enact the Committee's recommendations."

Hang on to your hats.  It's going to be a rough year and a half.

 

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3 Comments

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This page contains a single entry by Granny G published on August 2, 2011 3:01 PM.

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