Saturday, December 1, 2012
There is a question floating around whether President Obama will be responsible for pushing the country over the fiscal cliff. The answer is 'NO'. At the present time, both Democrats and Republicans are in a face-off and in the present situation, noone is going to win. The Republicans are not willing to sign off on a permanent tax hike on the rich, people making over $250,000, but seem to be willing to let the middle class pay higher taxes instead. The Democrats don't seem to want to budge from the President's stance, which is to provide take breaks for the middle class and tax hikes for the rich. The Senate has already passed a bill to support the President's stance on taxes, but the House, led by Speaker John Boehner is not willing to even bring the vote to the floor.
The President has the upper hand after winning re-election, and will have even more clout to raise taxes on the rich if the Republicans fail to act soon. Even more-so, if the Republicans fail to act prior to next year, they stand a great chance in loosing the House in 2014. The ironic thing here is that the tax cuts will take place for the middle class, and most likely will be retroactive to Jan 1 if the tax cuts are not given to the middle class before January. Tax cuts are pretty certain to take place anyway.
In a scenario of no tax cuts through 2013, which seems to be virtually impossible, what would happen if there were no tax cuts for the middle class? For starters, by summer the country will plummet into another depression, one that the country may not be able to recover from and up to 700,000 jobs could be lost.
Here's a short list....
1) Starting at the top affecting the 1%'ers and stock market investors will be the maximum rate on long-term gains which will be increased from 15% to 20%. But in an unbelievable turn of events, maximum rates on dividends will go sky high to nearly 40%.
2) Dividend taxes on the two lowest income brackets who now pay 0% will rise to 10% on long-term gains, and almost 30% on dividends. If you are an investor, your life has to really suck right now. The future in investments are bleak unless Congress acts very soon.
3) Like other analysts, Macroeconomic Advisers NOV.29th article predicts that the “Doing Nothing” approach would cripple the short-term economy: Unemployment would rise to 8.5 percent by the end of 2013; the stock market would fall about 15 percent in the beginning of the year and barely recover; and GDP growth would be anemic.
4) After 2013, economic growth starts to pick up again, but the severe fiscal contraction from the “fiscal cliff” would lower GDP growth and raise unemployment for the next decade. 2013 will most likely be a living hell for most.
After all the stir about the effects of the fiscal cliff, how tone deaf are the Republicans? Republican Newt Gingrich leads the pack.
All you have to do is look at a blog post on 'Gingrich Productions' belonging to Gingrich. He believes that the fiscal cliff is just something made up by the Democrats and the news media, and is just a figment of our imagination. It's probably just as much as a figmant in his eyes as his manning the moon with human population which is now just a figment of our imagination. To read his outlandish post in his blog, go to this URL for the full text.... http://www.gingrichproductions.com/2012/11/there-is-no-fiscal-cliff/
Read more about the fiscal cliff on another article on this blog at