Thread: How the Fiscal Cliff May Affect Your Taxes

Boehner offers tax increase on $1 million-plus along with entitlement cuts,
Obama turns it down
By Doug Powers • December 16, 2012 02:27 PM

Before proceeding, you’d better put on a hard hat… just in case.

Here’s our fiscal cliff update for the weekend: http://hosted.ap.org/dynamic/stories...12-15-21-23-10

Signaling new movement in “fiscal cliff” talks, House Speaker John Boehner has proposed raising the top rate for earners making more than $1 million, a person familiar with the negotiations said. President Barack Obama, who wants higher top rates for households earning more than $250,000, has not accepted the offer, this person said.

The proposal, however, indicated progress in talks that had appeared stalled. The person would only discuss the plan on the condition of anonymity because of the sensitivity of the negotiations.

Leaving $250k to $999k earners with no tax increase coupled with the large spending cuts in Boehner’s proposal means the offer was destined to be turned down, which it was: http://www.reuters.com/article/2012/...8BE0AN20121216

President Barack Obama is not ready to accept a new offer from the Republican leader of the U.S. the House of Representatives to raise taxes on top earners in exchange for major cuts in entitlement programs, a source said late Saturday.

The shape and details of Boehner’s offer were uncertain Saturday night, as was the exact reason the president was prepared to reject it.

The source said Obama sees the offer made on Friday by U.S. House Speaker John Boehner as a sign of progress, but simply believes it is not enough and there is much more to be worked out before Obama can reciprocate.

Is there a strategy to Boehner’s approach, or is this just the start of the cave-in process? That’s more of a rhetorical question, because there will be no putting that tax increase genie back in the bottle, and the White House knows it. Obama’s strategy is probably to keep sending these offers back with a note attached saying “you’re getting warmer” until the Republicans accidentally counter with more than Obama was asking in the first place. I say that half jokingly — okay, maybe quarter jokingly.

Remember — last week NYT reporter Helene Cooper said there’s a palpable atmosphere of cockiness at the White House and that Team Obama doesn’t feel they should have to negotiate:
http://www.youtube.com/watch?v=wXKN8...layer_embedded


**Written by Doug Powers http://michellemalkin.com/2012/12/16...ncrease-obama/

John Boehner suggests tax plan previously proposed by Nancy Pelosi;
‘Not a serious proposal’ says… Pelosi
By Doug Powers • December 18, 2012 03:28 PM

In May, Nancy Pelosi wrote a letter to House Speaker John Boehner requesting an immediate extension of the Bush tax cuts for Americans earning less than a million dollars per year, and for the cuts to expire on those earning more than that amount: http://www.democraticleader.gov/news...ncome-tax-cuts

Without further delay, the Majority Leadership should schedule a vote on extension of the middle-income tax cuts, as early as next week, to increase certainty for millions of American taxpayers and for the economy. We should not delay passing this legislation that will help afford all Americans the opportunity to reach their goals and realize the promise of the American Dream.

We must ask the very wealthiest Americans to pay their fair share. Democrats believe that tax cuts for those earning over a million dollars a year should expire and that we should use the resulting revenues to pay down the deficit.

This morning, John Boehner proposed the same thing, and the White House dismissed it: http://www.huffingtonpost.com/2012/1...n_2322802.html

Democrats from the White House and beyond panned the new “Plan B” proposal of House Speaker John Boehner avoid at least the tax portion of the fiscal cliff, but anti-tax GOP House members sounded cautiously optimistic about the idea of passing a measure that allows tax hikes only on income over $1 million.
[...]
White House spokesman Jay Carney later released a statement panning Plan B, saying that the sides should keep negotiating and that Plan B idea would not meet Obama’s top priority of protecting middle-income earners.

“The Speaker’s ‘Plan B’ approach doesn’t meet this test because it can’t pass the Senate [not true - DP http://freebeacon.com/white-house-an...ehners-plan-b/ ] and therefore will not protect middle class families, and does little to address our fiscal challenges with zero spending cuts,” Carney said.

Nancy Pelosi panned the Pelosi plan as well: http://www.businessinsider.com/boehn...chumer-2012-12

“It’s a tactic, but it’s not a serious proposal,” she said.

I actually agree with her. No proposal that originated with Nancy Pelosi should be taken seriously. Celebrate bipartisanship!

Today Pelosi said she only made that proposal in May as a ploy to “smoke out the Republicans” on raising taxes on the wealthy: http://nation.foxnews.com/nancy-pelo...-raising-taxes

http://www.youtube.com/watch?v=AHHfH...layer_embedded

Something just happened — though I’m not exactly sure what.





**Written by Doug Powers http://michellemalkin.com/2012/12/18...losi-proposal/

Despite leaning hard on rank-and-file members, Boehner fails to pass ‘Plan B’;
House adjourns, Dow plunges

Posted at 8:26 pm on December 20, 2012 by Twitchy Staff

http://twitchy.com/2012/12/20/despit...ouse-adjourns/

Examiner: "A new study from the widely respected National Bureau of Economic Research released this week has confirmed beyond question that the left's race-bait...ing attacks on the housing market (the Community Reinvestment Act--enacted under Carter, made shockingly more aggressive under Clinton) is directly responsible for imploding the housing market and destroying the economy.

Again, let's review:

-President Bush went to Congress repeatedly for years warning them that Fannie Mae and Freddie Mac were going to destroy the economy (17 times in 2008 alone). Democrats continuously ignored him, shut down his proposals along party lines and continued raiding the institutions for campaign contributions on their way down."

http://www.examiner.com/article/new-...alerts_article

Fiscal Cliff Tax Hikes Are Not The Only Scary Thing That Could Happen To You On January 1
The Huffington Post | By Catherine New Posted: 12/27/2012 3:06 pm EST

President Obama returned to Washington to resume "fiscal cliff" talks on Thursday, after cutting short his holiday in Hawaii. Unfortunately, the likelihood of the president and Congress reaching a deal by the Dec. 31 deadline appears slim, as Democrats and Republicans have been unable to reach a compromise. The fiscal cliff refers to a series of expiring tax breaks, new taxes and spending cuts that will all take effect starting Jan. 1 unless an alternate deal is reached.

Here are 10 ways your money could be affected if there is no deal reached by the end of the year:

1.Your Income Tax Rates Will Go Up The expiration of the Bush-era tax cuts on Dec. 31 means nearly every American taxpayer will see their rates go up when the rates go back to their 2001 levels. President Obama’s plan to avert the cliff includes keeping the current rates for middle- and low-income earners, while allowing the rates to increase for the highest income levels from 35 to 39.6 percent. Republicans have pushed to keep the tax cuts for everyone.

2.Your 2012 Tax Bill Will Be Huge As many as 28 million Americans are about to be slammed with the alternative minimum tax because a "patch" to adjust the AMT for inflation will not go into effect unless Congress acts. For middle-class households with kids and earning around $75,000, the AMT will add $3,700 on average to the tax bill for 2012 alone.


3.Your Paycheck Will Be Smaller The first paycheck of the year is going to be smaller for up to 125 million Americans after the Social Security payroll tax holiday expires on Dec. 31, raising the rate from 4.2 to 6.2 percent.


4.Your Tax Refund Will Be Delayed The Internal Revenue Service has said that without a deal by Dec. 31, tax refunds could be delayed for as many as 100 million taxpayers as the government agency scrambles to revise tax forms to reflect the changes post-cliff.


5.Your Kids Will Cost You More Money Among the tax credits that expire on Dec. 31 are several that help lower- and middle-income families with kids, including the Child Tax Credit, Earned Income Tax Credit, Child and Dependent Care Credit, and the American Opportunity Credit. All four revert to lower levels on Jan. 1, which could cost families hundreds to thousands of dollars in lost tax credits, according to CNN Money.


6.You Cannot Collect Extended Unemployment As many 2 million unemployed Americans won’t be able to collect extended benefits after Jan. 1, when the federal government’s unemployment extension ends as part of automatic spending cuts.


7.Your Stocks Could Wobble The stock market tumbled on Thursday after Senate Majority Leader Harry Reid (D-Nev.) said it looked like the the country was going to go over the fiscal cliff. Uncertainty over taxes could create more market volatility, experts say, but there is a silver lining: The Fed has promised to keep interest rates low for the next year, and that could help stabilize the economy overall.


8.If You Use Medicare, It Will Be Harder To Find A Doctor One of the spending cuts that will be enacted on Jan. 1 is a 30 percent reduction in the rates Medicare pays doctors. According to physicians' groups, the pending change has already sent doctors fleeing some health care plans, Forbes reported.


9.Finding A New Job Will Be More Difficult Mandatory spending cuts slated to start on Jan. 1 will cut into government jobs and jobs dependent on federal contracts. One report from George Mason University estimated that the cuts could cost 2.14 million jobs, the Christian Science Monitor reported.


10.High Earners Will Pay New Taxes For Obamacare High-earning taxpayers will pay a new 3.8 percent tax hike on net investment income, including income from interest, dividends, capital gains, rental and royalty income. Much of that same income group is also subject to a new .9 percent increase in Medicare taxes. These tax hikes are part of the Affordable Care Act and go into effect on Jan. 1.

http://www.huffingtonpost.com/2012/1...comm_ref=false

So Obama is willing to sacriffice the 98% of us to tax the top 2% .. FYI the tax increase on the top 2% will run the country 8 days !!

..

We all are going to get tax hike. This has been planned from the start. The fiscal cliff thing is just something they're using to have an excuse to raise taxes.

Fiscal cliff negotiations update: Biden, Congress to receive pay increases — no other news to report
By Doug Powers • December 28, 2012 04:34 PM


All of us watching the “fiscal cliff” circus (or as much of it as we’ve been allowed to watch http://twitchy.com/2012/12/28/cbs-ma...l-cliff-talks/ ) who are potentially faced with paying higher taxes next year while the country is set to hit the debt limit on New Year’s Eve have only one question on our minds: When will President Obama lift the pay freeze on federal employees?

Well lose sleep no more, America, because that day is today: http://www.weeklystandard.com/blogs/...rs_692223.html

President Barack Obama issued an executive order to end the pay freeze on federal employees, in effect giving some federal workers a raise. One federal worker now to receive a pay increase is Vice President Joe Biden.

According to disclosure forms, Biden made a cool $225,521 last year. After the pay increase, he’ll now make $231,900 per year.

Members of Congress, from the House and Senate, also will receive a little bump, as their annual salary will go from $174,000 to 174,900. Leadership in Congress, including the speaker of the House, will likewise get an increase.

Did Biden’s contract called for an additional performance bonus if he hit more than 100 gaffes during the 2012 election season — a goal he eclipsed easily.

Here’s a good question: https://twitter.com/DLoesch/statuses...w_p=tweetembed

Dana Loesch✔
@DLoesch

Shouldn’t the senate pass a budget before getting a pay raise? weeklystandard.com/blogs/obama-or…

28 Dec 12

They could be thinking that if they pass a budget there might not be enough wiggle room for a pay raise, so it’s best to do it the other way around.

Still no fiscal cliff deal to announce. There are reports of a “mini deal” in the works, which often turn out to be one giant horrible idea chopped into smaller bite-size pieces. http://www.washingtontimes.com/news/...al-cliff-deal/

**Written by Doug Powers http://michellemalkin.com/2012/12/28...-negotiations/

ccomments

So the kabuki has been reduced to staging phony meetings only to announce that nothing has changed. It wouldn’t surprise me if what they really talked about was how to handle the upcoming civil unrest when the fit hits the shan.

Everyone talks as if it will be a slide down the cliff or a bungy ride. No. Once the death spiral starts, it will quickly gain speed. Layoffs will trigger more layoffs as consumption spending plunges and debts don’t get paid. We are heading for a monumental crisis. And look who’s in charge. The enemy controls “both” sides of the table.

...

Maybe this is a good time to ask:

What is the Presidential “Entertainment Allowance,” and how is it that he and his wife seem to enjoy unlimited benefits due to his position as CEO of USA?

One would think, since Congress has sole authority with the country’s purse strings, they would limit he and the FLOTUS’ seemingly endless gadabout ventures…or is that a path huevos-less Republicans dare not tread?

Heh…threaten to cut off funding for PLOTUS-POTUS’s travel and entertainment budget…talk about negotiating leverage!


..


One would think, since Congress has sole authority with the country’s purse strings, they would limit he and the FLOTUS’ seemingly endless gadabout ventures…or is that a path huevos-less Republicans dare not tread?

And take a chance of retribution if/when a republican gets elected? Not a chance.

We’re dealing with an entire Marie Antoinette elite class and neither side gives a rat’s ass about the “little people” . . .at least until the next election any way.

Tick tock: No deal on the fiscal cliff yet; Update: The last hope is …
posted at 9:31 am on December 31, 2012 by Ed Morrissey

I think this is the moment when Harvey Keitel started running after the blue 1966 Thunderbird convertible at the Grand Canyon, isn’t it? http://thehill.com/homenews/senate/2...s-on-the-cliff

Senate leaders are racing against the clock to reach a “fiscal cliff” deal the House and Senate can approve on New Year’s Eve.

Leaders in the upper chamber narrowed their differences Sunday as Republicans agreed to drop a demand to curb cost-of-living increases to entitlement benefits, while Democrats showed flexibility on taxes.

Yet after months of talks on ways to avoid the fiscal cliff of tax hikes and spending cuts at the end of 2012, House and Senate lawmakers find themselves approaching the new year without a bill to present to their members.

Significant differences remain over two key parts of a deal — the automatic spending cuts known as the sequester and the estate tax.

Instead of working through the night, the Senate recessed at 7:27 p.m. Sunday with plans to reconvene Monday at 11:00 a.m., and the House recessed around the same time.

Without legislative language, the likelihood of stopping the leap seems pretty low. Even if Harry Reid and Mitch McConnell reach a deal this morning, they’d have to schedule a vote by this afternoon — and hope it gets a floor vote with no debate by unanimous consent. What’s the likelihood that Rand Paul will allow that? Remote.

Even if the Senate managed such an effort, the House would have to pass the deal in time for Barack Obama to sign it before midnight. I think the goal now has become to pass a deal before the next Congressional session starts, so that they don’t have to restart the process all over again. That means that the new deadline will be Wednesday, January 2nd, and a deal this morning with legislative language has a decent shot at making it … assuming a deal is reached at all.

Here’s Chuck Todd claiming that the chances of getting a deal “really depends on the political motivations” of the negotiators. In other words … status quo ante, right? This whole crisis generated from political motivations over the last three years. It started with Harry Reid refusing to use the normal budget process in order to shield Democrats from voting for the fiscal consequences of their own spending policies, preferring artificial crises to pressure Republicans into sharing the blame for them; otherwise, we could have resolved all of these disagreements through the usual conference-committee process. Funny how Chuck never mentions that while insisting that it’s the Republicans who are making purely political moves at that point.

Update: Has it gotten this desperate? http://foxnewsinsider.com/2012/12/31...al-cliff-deal/ Help us, Joe-bi-Wan Bidenobi …

With the fiscal cliff just hours away, there is new hope that conversations between Sen. Mitch McConnell and Vice President Joe Biden can produce a deal to avert the financial disaster. Aides say the pair spoke multiple times last night and will continue working toward a solution.

McConnell called the vice president after waiting 18 hours for a counter proposal from Senate Majority Leader Harry Reid, who seemed to throw in the towel.

e thought of Reid getting cut out of the solution may make the pain of the compromise a little easier to take.

Update II: Andrew Malcolm has declared Biden the 2012 Joke of the Year. http://feedproxy.google.com/~r/Andre...ion-whacko.htm Maybe the joke will be on Harry Reid …


The new apparent “deal” includes a 5% increase in the Death Tax from 35% to 40%. AWFUL. There is no way that gets even a majority of support amongst the GOP House members. McConnell is selling us out. http://bigstory.ap.org/article/fisca...deadline-nears

http://hotair.com/archives/2012/12/3...cal-cliff-yet/

BREAKING NEWS: Any attempt to avoid the fiscal cliff will not be voted on today in the House of Representatives.

We will update this story as soon as we receive more information.


http://www.nbc33tv.com/news/national...ff-will-not-be

The so called "fiscal cliff" deal has gotten our chief strategist all fired up. Check out this video, it's only a minute long and Happy New Year! http://www.youtube.com/watch?v=YUU-7LnUA_0

This "deal" has me pretty fired up, so I made a video. It's only about a minute long and since my resolution is to make more of these videos, I'd love your input to help me make them better! http://www.youtube.com/watch?v=YUU-7LnUA_0

Where is the other party on this? Bueller? Bueller?


Senator urges Obama to rescind pay raise for Congress
Published December 31, 2012
Washington – Republican Sen. Rob Portman is urging President Obama to rescind a recent executive order granting pay increases to Congress and other federal officials, saying the move doesn't exactly jibe with the country's debt crisis.

Obama signed an executive order last week that will lift a ban on pay freezes for federal employees.

Rank-and-file members of Congress would all see a $900 bump next year -- up from $174,000. Congressional leaders will receive a slightly higher raise, with the House speaker receiving a $1,100 salary increase to $224,600. The top two Senate leaders will see pay rise $1,000, to $194,400.

Vice President Biden, meanwhile, will see his pay increase from $225,521 last year to $231,900 after his raise goes into effect March 27, 2013.

But the pat on the back came as a surprise to some, given the lack of progress all year toward a deal to head off the looming fiscal crisis -- which includes $600 billion in tax hikes and spending cuts. Even if that is resolved, Washington has still done relatively little to address the more than $16 trillion debt.

Rep. Michele Bachmann, R-Minn., introduced legislation Monday that would rescind the pay raises.

“I am calling on my colleagues in the House and Senate to rescind President Obama’s executive order that gives members of Congress a pay raise," she said in a statement. "This executive order was not requested by Congress and we should reject it. We have a spending problem in our country and we should be looking for areas to cut spending. At a time when families across the country are cutting back we should not increase government spending and add to the debt burden by giving members of Congress a pay raise. We need to begin with ourselves and I urge my colleagues to join me in this effort.”

Portman said now is not the time for bigger salaries in Washington -- at least not until the country can deal aggressively with its debt and deficit problems.

"At a time when our country is facing record debt and trillion-dollar deficits, the last thing Washington should do is reward itself with a pay increase," the Ohio senator said. "I am calling on President Obama to withdraw his recent executive order raising federal salaries -- including for members of Congress. Until a long-term deficit reduction agreement is reached, we should not consider increasing the pay for Congress."

Obama also OK'd raises for circuit and district court judges.

http://www.foxnews.com/politics/2012...#ixzz2GfrQbo3j

http://www.foxnews.com/politics/2012...ess-pay-raise/

Senate-Passed Deal Means Higher Tax on 77% of Households

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.

The heaviest new burdens in 2013, compared with 2012, would fall on top earners, who would face higher rates on income, capital gains, dividends and estates. The top 1 percent of taxpayers, or those with incomes over $506,210, would pay an average of $73,633 more in taxes.

Much of that burden is concentrated at the very top of the income scale.

The top 0.1 percent of taxpayers, those with incomes over about $2.7 million, would pay an average of $443,910 more, reducing their after-tax incomes by 8.4 percent. They would pay 26 percent of the additional taxes imposed by the legislation.

Among households with incomes between $500,000 and $1 million, taxes would go up by an average of $14,812.

Top Tax Rate

The bill, being discussed by House members today, would raise the top tax rate to 39.6 percent from 35 percent last year, starting with income over $400,000 for individuals and $450,000 for married couples.

The top tax rates on capital gains and dividends would go up to 23.8 percent, from 15 percent last year. The new rate includes a 3.8 percent tax from the 2010 health-care law that took effect today.

The Tax Policy Center’s definition of income is a gross measure that includes items such as the employer’s share of payroll taxes, making it larger for many households than the adjusted gross income shown on tax returns.


http://www.bloomberg.com/news/2013-0...ouseholds.html