I really hate to do have to do this again. After a presidential election that centered on the economy, jobs and taxes, it is almost sad that I am writing yet another article on the very same issue.
Then again, what else can Americans expect after sending another divided Congress to Washington to work with such a divisive president?
The impending “fiscal cliff” is something both parties are using to hurl accusations at each other, but few Americans actually know what the term means.
Because steep tax increases and deep spending cuts are set to go into effect at the end of the year, a deal must be made to address those issues to prevent the economy from heading into what experts predict could be another recession.
The Bush tax cuts were set to expire in 2010, that is, until a deal was struck to extend them through 2012. If the cuts expire now, Americans would face a $6 trillion tax hike.
In addition, thanks to the Budget Control Act of 2011, federal government spending would decrease by $1.2 trillion. These events combined have economists worried that the U.S. could go into another recession in 2013.
That is why a deal between republicans and democrats must be made to restructure the tax cuts, the spending cuts, or a combination of both before the end of this year.
House republican leaders have announced they are willing to close tax loopholes, doing their part to increase revenue like the democrats want. Now they wait to see what spending cuts the democrats are willing to make.
This is a very ironic move when you consider how democrats like to call republicans the “party of 'no'.” Republicans have made a concession and put the proposal on the table.
Now, we have to wait and see if the democrats take this and move forward, or continue to whine. If so, they might as well go on and try to argue UVa is good at football, or Detroit is a nice place to raise a family.
The fact is, even though President Obama said on the campaign trail that we need a “balanced approach” to reduce the national debt, he has proposed zero spending cuts.
Instead, the president is proposing that Congress extend the Bush tax cuts for everyone except the top 2 percent of income earners. This may seem all right on the surface, but when you delve into the facts Obama fails to mention, you quickly realize this will not work.
Obama wants the rich to pay their “fair share,” but does not tell you they already are. A 2009 report from the Congressional Budget Office showed the top 1 percent earned 13.3 percent of all income in this country, but paid 22.3 percent of all taxes collected. Those numbers do not lie.
In addition, the country’s top income earners, or the “rich” — and I put that in quotes because many in our generation apparently think that rich is now a dirty word — are the investors in this country. They help grow companies and hire workers.
Hiring workers increases payroll, which increases wages that can then be taxed. Numerous studies have shown lowering taxes increases revenue to the government, and that is due to more investment and more jobs created.
Again, Obama and his counterparts in Washington will not tell you about those studies, just like they will not tell you the rich are already paying their fair share.
They also will not tell you that, according to “Forbes,” even taxing 100 percent of all income over $1 million still only brings in $616 billion. Never mind the fact that the national debt is over $16 trillion — this $600 billion fixes everything!
Let us remember that in the years following the Bush tax cuts in 2001, the economy grew faster than it ever has under Obama.
Before you claim Obama inherited a mess, remember: democrats had control of Congress in 2006. Plus, if you feel bad about his first term, you should feel awful about the mess Obama inherited with his second term.
The republicans have made their concessions in closing tax loopholes, and now it is the democrats’ turn. If they are not willing to make a move and offer up real spending cuts, then it is checkmate and the game is over. Only this time, the losers are the American people.