Wintery Knight

…integrating Christian faith and knowledge in the public square

Fiscal cliff deal raises taxes by $600 billion, increases spending $330 billion

The Heritage Foundation explains.

Excerpt:

The Congressional Budget Office (CBO) just now released its score of the bill the Senate passed early this morning while everyone was celebrating the beginning of the New Year. Despite knowing for a long time that taxes would go up on all Americans today, the Senate waited until we technically went over the cliff to act. Washington’s dysfunction was even fodder for New Year’s revelers in Times Square.

Going over the cliff allows Congress to technically say that it isn’t raising taxes, but is cutting them instead. CBO’s score backs them up on this by scoring the Senate bill as a $3.6 trillion tax cut. No one should fall for this. The Senate bill is a tax hike because it allows taxes to go up from 2012 to 2013. The tax increases in the bill will reportedly raise about $600 billion over the next 10 years.

Also of note in the CBO score is that the Senate bill increases spending by around $330 billion by extending expanded unemployment benefits, a temporary “doc fix” patch to prevent cuts to Medicare, and extension of the agriculture programs.

There was some good in the Senate bill — the harmful defense sequester cuts were postponed and most tax hikes were avoided. But there was bad — tax hikes that will hurt the economy and do little to tame the deficit, especially factoring in the spending in the bill.

As I noted before, the CBO has predicted that the bill will add $4 trillion to the national debt, taking us over the $20 trillion mark.

Bloomberg:

The budget deal passed by the U.S. Senate today would raise taxes on 77.1 percent of U.S. households, mostly because of the expiration of a payroll tax cut, according to preliminary estimates from the nonpartisan Tax Policy Center in Washington.

More than 80 percent of households with incomes between $50,000 and $200,000 would pay higher taxes. Among the households facing higher taxes, the average increase would be $1,635, the policy center said. A 2 percent payroll tax cut, enacted during the economic slowdown, is being allowed to expire as of yesterday.

According to the CBO, the deal would raise taxes by $41 for every $1 cut from the budget. Have we really dodged a fiscal cliff?

 

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2 Responses

  1. Mathetes says:

    Maybe someone will come to this page after learning about their taxes, the way these chumps found out about theirs:

    ——

    So this week, as taxes went up for millions of Americans — which Republicans predicted throughout the campaign would happen — it was fun to watch the agoggery of the left.

    “I know to expect between $93 and $94 less in my paycheck on the 15th,” wrote the ironically named “RomneyLies.”

    “My boyfriend has had a lot of expenses and is feeling squeezed right now, and having his paycheck shrink really didn’t help,” wrote “DemocratToTheEnd.”

    “BlueIndyBlue” added: “Many of my friends didn’t realize it, either. Our payroll department didn’t do a good job of explaining the coming changes.”

    So let’s explain something to our ill-informed Democratic friends. In 2009, Mr. Obama enacted a “holiday” on the payroll tax deduction from employees’ paychecks, dropping the rate from 6.2 percent to 4.2 percent. But like the holidays, the drop ended, and like New Year‘s, the revelers woke up the next morning with a massive hangover and a pounding head.

    One calculated it [new tax] would cost about $86 a month for most people. “Honeycombe8,” though, said that amount is nothing to sneeze at.

    “$86 a month is a lot. That would pay for … Groceries for a week, as someone said. More than what I pay for parking every month, after my employer’s contribution to that. A new computer after a year. A new quality pair of shoes … every month. Months of my copay for my hormones. A new thick coat (on sale or at discount place). It would pay for what I spend on my dogs every month … food, vitamins, treats.”

    Read more: http://www.washingtontimes.com/news/2013/jan/6/obama-supporters-shocked-angry-new-tax-increases/?page=1#ixzz2HGWneY9N

    • Yes, there was a hilarious post on Democrat Underground that I posted where one of them was shocked to find that you pay for trillion dollar deficits by only taxing the rich. It’s hilarious. I think I will use this article you posted for tomorrow’s 10 AM post.

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