January 2 2013
As Americans celebrated the New Year, our nation stepped off the fiscal cliff.
Do not be deceived by politicians’ claims the fiscal cliff was averted. Congress and the White House increased the federal deficit by $4 trillion, extended tax rates for certain Americans, delayed the sequester until March, and did nothing to address the growth of federal spending. Spending actually increased. Our nation is still $16.4 trillion in debt, the eyes of credit rating agencies are steadfastly upon us, and Medicare and Social Security are still in need of reform.
The deal, passed the Senate 89-8 and begrudgingly caught enough Republican votes to pass the House 257-167. The measure allows taxes to rise for individuals making over $400,000 a year and couples making $450,000 per year – many of whom are small business owners who file their business’ taxes on their personal forms.
While the Bush tax rates were made permanent for middle class and low-income families (a laudable achievement), no spending cuts offset these tax decreases.
Yet no taxpayer get’s away without some tax increase. According to John McKinnon in the Wall Street Journal, average Americans will pay $1,635 more in taxes next year, while those making between $500,000 to $1 million will pay $15,055 more and those over $1 million will pay $171,330.
The legislation also delays the largely unpopular sequester – which by the way was one of the few reductions in the growth of spending seen to date -- until March. Forget other real issues confronting our nation, such as an overly complex, burdensome tax code or immigration – the legislation ensures March will be spent debating the debt limit and how to get around the unpopular cuts established by the sequester.
Many experts believe the deficit must be reduced by at least $4 trillion. Instead, Congress increased it by $4 trillion. With ever-expanding federal debt, a potential downgrade of our credit rating, projected reductions in benefits from our social safety net, and no plan in sight, it is folly to say we have not gone over the fiscal cliff.