Let’s go over the fiscal cliff, by Marc A. Thiessen

[UCmeNdc]

Here’s an idea for how to start the New Year in a bipartisan fashion: Let’s go over the fiscal cliff!

Today, the only ones in Washington who advocate fiscal cliff-diving are liberal Democrats. It’s time for conservatives to join them. Letting the Bush tax cuts expire will strengthen the GOP’s hand in tax negotiations next year, and it may be the only way Republicans can force President Obama and Senate Democrats to agree to fundamental tax reform.


http://www.washingtonpost.com/opinions/marc-thiessen-lets-go-over-the-fiscal-cliff/2012/11/19/be05bc72-3251-11e2-9cfa-e41bac906cc9_story.html



I just do not see Marc Thiessen's concept and his reasoning as being correct. He seems to believe the GOP will gain political advantages from going over the fiscal cliff on Jan 1st, 2013. He lists all of his reasons for his opinion. But, to me, his reasoning seems to really, in reality, put the Democratic party into the political advantage column.

As the Democratic leaders push to reinstate some of these lost middle class tax relief laws Marc lists, the GOP will have to fight against re-installing them. This will cause a crisis within the GOP. Especially if the Democratic leaders change the filibuster rules and ultimately make Senators to have to actually stay on the floor to hold a filibuster. Can you imagine how it would look if the GOP held up the nation's business day after day stating hour after hour why the middle class tax breaks should not be reenacted?

Naw, the fiscal cliff is good for the Democratic Party. Let's jump!

[John2]

1. I

see that he is with the American Enterprise Institute. He is delusional if he thinks this debate over taxes suddenly resets after going off the fiscal cliff in January. We had an election and President Obama clearly won. He fails to mention, the compromise that President Obama's side already have on the table.

The offer now is to extend the tax cuts for the middle class and poor. The Bill has passed the Senate and right there for his people in the house to sign. Democrats in the house will sign it too. If the House Republicans don't sign it, the electorate is not stupid. The House Republicans will be seen as raising taxes on the middle class and poor, just to secure extending tax cuts for the wealthy. The problem with the House Republicans, they see the wealthy as the same as the middle class and poor. Smart people see right through this and even wealthy people like Warren Buffet chuckle at Thiessen's logic.

Furthermore, if we go off this cliff, everybody will suffer but more particularly, the military industry, which many Republicans depend on votes for. So the Republicans can go ahead and throw that constituency under the bus too, just to protect their Holy grail. Essentially this is compared to a hostage situation, and the Democrats are now saying, Make My Day, and we will see who suffers in 2014. And the notion Republicans refer to entitlements that they want to cut (Social Security and Medicare), they actually ran away from that debate when they confronted actual voters. It brings them clear out in the open, where older voters, in states such as Florida, will finally realize what Republicans were up to all along. They really wanted to throw them over the cliff, to protect the greedy. And I think the Democrats can finally get an endorsement from the AARP now.

[brooklynite]

2. My wife is a respected Tax Lawyer...

....and she tells me the results would NOT be good. I'll go with her analysis.

[otherone]

5. no deal

going off the cliff would be bad according to your wife?

[Filibuster Harry]

3. This is a very interesting discussion topic. If congress does nothing by Dec 31st then this fiscal

cliff as politicians use will hurt many --- but only if nothing is done in 2013.
One interesting issue is whether this congress should do something or let the new congress handle this?
Another issue is by not doing anything tax rates rise. do you hear that Grover? So, are all the republican
pledge signers going to be primaried? Dividend rates go to regular tax rates whereas Obama's plan is to increase dividend tax rates for the wealthy from 15% to 20% (not at regular rates with the max of 39.6% if nothing is done).
Military cuts take affect which the Rs wouldn't like. But also some tax credits and cuts in unemployment benefits also happen.
According to the Wall Street Journal (11/21/12) here is a breakdown of who would bear if the fiscal cliff
happens:
-- Top 20% (average income before taxes $ 244,576) would bear 60.3% of the tax increase
-- Second 20% (ave income $ 84,335) 16.9%
-- Third 20% (ave income $ 52,294) 11.4%
-- Fourth 20% (ave income $ 30,031) 8.2%
-- Fifth 20% (ave income $ 11,290) 3.1%

Higher tax rates for all, AMT relief going away, loss of benefits for the working poor, reduction of the child credit, and loss of payroll tax holiday are all issues that affect each taxpayer in some way. There are no winners , in my opinion, if nothing gets done. In addition, if congress can't work together a possible downgrade in this country's credit rating is sure to happen. And let's be serious: If congress can't work this out why would anyone think they can do a tax reform package when they can't even decide on rates for only two brackets?

[muriel_volestrangler]

4. Worth showing the relative hits each of the quintiles take

divide the percentage of the tax increase by the average income for each, and you get:
top 20%: 0.25 'units' (%/$1,000 of income)
2nd 20%: 0.20 units
3rd 20%: 0.22 units
4th 20%: 0.27 units
5th 20%: 0.27 units

So the lowest paid will be affected the most, in terms of how much of their income they lose. This is worth bearing in mind with the calls to let everything expire.