"Taxmageddon" is coming on January 1, 2013. What does that mean? Well, we (US taxpayers) can expect large tax increases. Romina Boccia, James Sherk and Katie Tubb of the Roe Institute at The Heritage Foundation, say:
"The nation is now firmly on track to go over the fiscal cliff in January 2013 unless Washington takes action. The uncertainty leading up to the fiscal cliff - especially Taxmageddon - is already hurting the economy today and, according to projections by the Congressional Budget Office, could send the country back into recession in 2013."
So, just what is "Taxmageddon?" It is a massive tax increase of $494 billion over what we already pay, the largest tax increase ever! And that's on top of the $502 billion ObamaCare tax, er, mandate, er, tax coming over the next ten years. The average US household will see a tax increase of $3800 in 2013 alone, with higher tax bites in subsequent years. I'll never understand how having less to spend will have no effect on the US economy, but, hey, Obama's economic team, his Council of Economic Advisers (CEA), has known what's best, in spite of being wrong every time. According to the most recent CEA report:
"... the economy posted its thirteenth straight quarter of positive growth, as real GDP (the total amount of goods and services produced in the country) grew at a 2.0 percent annual rate in the third quarter of this year, according to the 'advance' estimate released by the Bureau of Economic Analysis. Over the last thirteen quarters, the economy has expanded by 7.2 percent overall,...."
"Growth" and "expansion" are not the same thing. Other than to make President (for life?) Barack Hussein Obama's economic policies look good, why were the two (completely different) concepts included? Further, nowhere in the CEA report can I find an explanation of what an "advance estimate" is, or that the advance estimate is typically adjusted downward as complete information becomes available.
Article comments
— go to most recent comments1 - Igor
The republicans are holding the middle class taxes hostage so they can try to keep big tax cuts for their patrons, the very rich. Middleclass people are fooled into believing that the reps have some interest in their welfare, but it is not so. The reps are financed and owned by the 2% at the very top, and gladly sacrifice the interests of the middleclass to curry favor with the most rich and powerful.
2 - Charles Griswold
What does "(for life?)" mean? Do you hear that Secret Service?
Obama is SO bad at fixing the economy? Compared to whom? George Whitebread Bush?
"Obamacare" is a tax? It is manditory health insurance at rates lower than you can get now.
Conservatives really do live in a world of self delusion.
3 - Glenn Contrarian
Warren -
Do you know the difference between rumor and fact? Do you? Look at your blurb about France - the proposed tax hike "sparked RUMORS that France's wealthiest people could leave the country to avoid paying taxes". (caps mine) RUMORS, Warren.
And did you actually READ your references about that "two-thirds of millionaires" that left England after they raised taxes? I did - and here's something I found very interesting:
In the 2009-10 tax year, more than 16,000 people declared an annual income of more than £1 million to HM Revenue and Customs.
This number fell to just 6,000 after Gordon Brown introduced the new 50p top rate of income tax shortly before the last general election.
The figures have been seized upon by the Conservatives to claim that increasing the highest rate of tax actually led to a loss in revenues for the Government.
It is believed that rich Britons moved abroad or took steps to avoid paying the new levy by reducing their taxable incomes.
George Osborne, the Chancellor, announced in the Budget earlier this year that the 50p top rate will be reduced to 45p from next April.
Since the announcement, the number of people declaring annual incomes of more than £1 million has risen to 10,000. (boldface mine)
YOUR reference tried to make it sound like the millionaires left the country to avoid paying taxes. Maybe some did, but if one STUDIES what's said, a different picture emerges:
1. 2010 - there were 16,000 millionaires...and the announcement is made.
2. Sometime around then, the tax hike is announced and 10,000 millionaires 'disappear' (OH NO THE SKY IS FALLING!!!!!).
3. Just ONE year later, the tax hike is dropped five percent - FIVE LOUSY PERCENT, but still significantly above what it was prior to 2010 - and (gasp!) 4,000 millionaires magically reappear! It's MAGIC!
IN OTHER WORDS, Warren, the millionaires never left. The vast majority of them simply used what were called "tax avoidance schemes" - what we in America call 'tax breaks' and 'deductions' - to avoid paying taxes. Very, very few people who are living a quite comfortable life choose to uproot their families and move to a foreign nation just because of taxes - and your Scarlett O'Hara claims that the rich are a-gonna leave just because of the taxes ("Oh, wherever shall we go, whatever shall we do?") are simply smoke and mirrors from the rich who have found that all they have to do is to spend a few advertising dollars to tell YOU that THEY are the oh-so-holy job creators, and that that if YOU don't cut their taxes, they're going to leave...and you act like the classic battered wife who is choosing to keep getting battered so you can keep the guy you THINK is providing for you.
Do you know what happened when we had a NINETY-ONE PERCENT top marginal tax rate in the 1950's under Eisenhower? Did all the rich people leave? Of course not. They - like the English millionaires above - used tax breaks and deductions to avoid paying so much...and most of those deductions were reapplication of their income back INTO the businesses they owned (like giving raises to their workers). I don't know if you realize this, Warren, but putting money BACK into business to help it grow is generally considered a GOOD thing.
Not that you'll listen - you're too embedded deep within the fact-free Fox News bubble to be able to read between the lines of what you're being fed.
4 - troll
...I guess Warren knows who John Galt is
5 - Dr Dreadful
Hmm... on the Politics homepage we have Warren warning us that the Fiscal Cliff is approaching, while directly above this headline is Kenn advising us that the Fiscal Cliff has already passed.
Surely one of them is right... but which one? It'll be fun finding out.
6 - roger nowosielski
"Fiscal Cliff"
Come to think of it, a good name for a soap opera, like "Twin Peaks." If we could only get David Lynch to direct it, it would bound to be an instant success.
7 - cindy
Roger,
I think you should write the sequel to Atlas Shrugged. Zoom in on a mansion with a six foot high lawn, continue through a dirty window to find John Galt and his buddies shuffling around in wrinkled tuxedos wondering who is going to do the dishes and serve the caviar. Meantime back in the world of people they abandoned the working class are living it up with worker run businesses, food and housing and medical care for all and more recreational time than anyone ever imagined possible.
8 - Not the liberal actor
Re: comment # 1, Igor, did you even bother to read the article, especially the part about the so-called "Bush tax cuts?"
Re: comment # 2, Charles, are you a brother to Clark? Your comment makes about as much sense as he does.
Re: comment # 3, Glenn, your rant is based upon (1) one word that you say poisions my point about raising taxes, and (2) YOUR interpretation of one of my sources. Yet you somehow manage to ignore other sources, human nature, and economic reality. I again have to ask: Are you for real, or are you here for comic relief?
You say, "... putting money BACK into business to help it grow is generally considered a GOOD thing." Please explain to me how raising taxes puys money back into businesses.
Re: comment # 4, troll, I've read the book. Your point????
Re: comment # 5, yes, Doc, finding out whether Kenn is or I am correct will, indeed, be fun.
Re: comment # 7, yeah, cindy, just like in the USSR. Let's see, all the things you cited were promised to USSR citizens. But wait, the USSR collapsed didn't it?
And I couldn't help but notice that NO commenters even remotely addressed the questions I raised. (or did I raze them?)
9 - Glenn Contrarian
Cindy -
Brilliant!
10 - Glenn Contrarian
Warren -
Please explain to me how raising taxes puys money back into businesses.
(1) On a smaller scale, most of those taxes find their way into government-paid workers, who then spend the money at businesses owned by the rich...and they get important infrastructure work done in the process.
(2) On a LARGER scale, the rich face a choice. They can either pay the taxes, OR they can pour enough of their income back into the business (which is, as you should know, tax-deductible) that it takes their income (at least on paper) down to a level where they show little enough income that they pay far less in the way of taxes.
So which do most of them do - pay taxes, or put the money back into their businesses? Hm?
NOW, Warren, are you going to claim that putting money back into businesses is somehow bad for the economy?
AND WHILE YOU'RE AT IT, explain to us why it was that during most of the 1950's, when we had NINETY-ONE PERCENT top marginal tax rates for the rich, not only did they not go broke or leave the country, but they still got richer? Why did America's economy boom with those incredibly high tax rates? Surely you realize, Warren, that according to Conservative Holy Dogma, that ninety-one percent top marginal tax rates SHOULD have driven us back into a Great Depression. Why didn't it?
Here's a hint: the answer's in this very comment.
11 - Igor
@8-Not: did YOU even bother to write the article or is this another of your famous plagiarisms?
12 - Clavos
On a LARGER scale, the rich face a choice. They can either pay the taxes, OR they can pour enough of their income back into the business (which is, as you should know, tax-deductible) that it takes their income (at least on paper) down to a level where they show little enough income that they pay far less in the way of taxes.
So which do most of them do - pay taxes, or put the money back into their businesses? Hm?
You forgot shipping it offshore, which is even better in terms of savings, and which many prefer.
13 - Glenn Contrarian
Clavos -
I think you'll find that most wealthy people are not manufacturers and can't just 'ship their businesses offshore'.
You may also be referring to people who will simply 'ship their wealth offshore' like a certain Republican presidential candidate did. But you know what, Clav? Right now, ONE family - the Walton family - has more wealth than the bottom 40% of American citizens. Maybe you think that's a good thing, but I sure as hell don't.
But here's the more salient point - it doesn't much matter if someone is just keeping their money stateside or in the Caymans or in Swiss banks, because if they're not SPENDING their money, it's not doing the American economy much good. So if they're not going to spend their money anyway, and if they're so craven that they can't cough up an extra few pennies on the dollar in the form of taxes to the country that has benefited them so greatly, then we're better off without them - let them go.
But you know what, Clav? If the decade of the 1950's are any indication, the great majority of them will avoid paying greater taxes by pouring more money into their businesses...and that's a good thing. I'd rather bet on history repeating itself instead of paying heed to the fears of OMG-the-Holy-Job-Creators-will-desert-us Chicken Littles of the modern 'conservative' segment of the population...particularly since there's precious little evidence that a 4.5% tax hike has EVER caused a mass exodus of the wealthy.
14 - Glenn Contrarian
And Clavos -
Speaking of Wal-Mart, you do realize that a significant percentage of their workers are on Welfare, food stamps, and Medicaid?
In other words, YOU and I and every other taxpayer is subsidizing Wal-Mart with billions of dollars every freaking year because their owners - a family that has more money than the bottom 40 percent of ALL Americans - are too damn stingy to pay them anything approaching a living wage.
Adam Smith - the father of capitalism - said everyone should be paid a living wage. Here's his quote:
"Servants, labourers and workmen of different kinds, make up the far greater part of every great political society. But what improves the circumstances of the greater part can never be regarded as an inconvenience to the whole. No society can surely be ?ourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, cloathed and lodged."
Today, YOUR people would call him a commie pinko socialist.
Anyone who freaks out over a lousy 4.5% hike in taxes on the people who can most afford it, who are wealthy beyond the dreams of Midas, well, we can do without such people. Let them go. But we also need a government strong enough to demand that everyone - including every single one of the 2.2 million workers at Wal-Mart - be paid a living wage. Once that is done, THEN you can cut taxes...because then the need for Welfare and Medicaid will be much less.
15 - Clavos
You may also be referring to people who will simply 'ship their wealth offshore...
I am indeed, and a lot more of 'em (including some who aren't all that wealthy) are doing it. Have you ever visited the Caymans, Glenn? I have; the sheer number of "banks" there is astonishing -- as many as 50 in a modest two or three story building.
Here's another thing: you've mentioned more than once how rich the Waltons are, but you never even think of all the people making serious money off the grid, who individually aren't all that rich, but collectively account for hundreds of billions, even trillions, according to various reports. I'm speaking of tradesmen who give discounts for cash payment, mechanics, dentists, physicians -- even lawyers who work "off the books," and millions and millions of "little people" doing the same on a more modest level.
From the Christian Science Monitor:
Perhaps the biggest surprise about America’s shadow economy is its size. Long associated with colorful street hawkers in the developing world, the shadow economy makes up a larger portion of the economies of countries like Greece (25 percent) or Mozambique (more than 40 percent) than it does in the US. But because America’s economy is so much bigger, its shadow economy amounts to nearly 8 percent of its gross domestic product (GDP); in the ballpark of $1 trillion, estimates Friedrich Schneider, an economics professor at Johannes Kepler University in Linz, Austria. That’s bigger than the GDP of Turkey or Australia.
From an article in Salon, an online magazine with a liberal POV:
The standard estimate of the current size of the shadow economy in the United States ranges from around 8-10 percent of total GDP; in 2010, an amount equal to around $1.4 trillion. (emphasis added)
Of course, none of that money is taxed. Add to that the personal funds kept overseas, and corporate funds sent away for the same reason, the total of which if taxed, would likely pay down the debt in short order, but if the government keeps on raising taxes, the shadow economy and funds shipped overseas will only continue to increase.
16 - Glenn Contrarian
Clavos -
Again, the ones who are so craven that they would leave America over a lousy 4.5% tax hike - up to the SAME rate we were at in the biggest fiscal boom in our history - are probably people we can do without.
Besides, your own comment provides the proof of what I'm trying to point out - these people (including your boys' presidential candidate) are already keeping their money overseas. They're ALREADY showing what they think about America. It is my point that yes, they can make more money TODAY by moving their money overseas, and the ones for whom that is important have already done so.
Come to think of it, Clavos, weren't these OMG-the-sky-will-fall Chicken Little anti-tax-hike arguments the SAME arguments the Republicans were making before Bush 41 and Clinton raised taxes? And what happened then?
What happened then, Clavos? Did the rich people desert America? Or did America's economy BOOM just like it did in the 1950's (when the top marginal tax rate was 91%)?
History, Clavos - and fairly recent history at that. History shows that a modest tax hike - and it is a MODEST tax hike - does NOT result in the worst fears of Chicken Little. As then, so now.
17 - Clavos
Umm, Glenn: Are you not paying attention? Did you not see and read the clips about the shadow economy? You're hung up on the rich; these days the MIDDLE CLASS is also tax dodging, and they number in the millions -- to the tune of over a trillion dollars a year!
Ask around the city where you live; you will easily find any number of tradesmen and even some professionals who will discount services to you for cash payment.
No comment?
18 - Clavos
As then, so now.
Are you really that naive, Glenn?
19 - Clavos
HAH!!
Now, even the media is beginning to advocate that the people not pay their taxes!
20 - Glenn Contrarian
Clavos -
#17 - "these days the MIDDLE CLASS is also tax dodging". REALLY???? You mean the middle class has just started tax dodging NOW???? STOP THE PRESSES!!!! The middle class is tax dodging now!!!!
Sounds silly? It's every bit as silly as does your implication that people are tax-dodging any more now than before. BTW, Clavos, I'd really like to see you show me that trillion-dollar reference, because the high end on the reference I found says half that, and isn't limited to just the middle class. Also from the same reference:
The Obama administration wants to increase the IRS budget from $12.1 billion to $13.3 billion in fiscal 2012 and add 5,000 IRS agents. About $240 million would go for "new, revenue-generating tax-enforcement initiatives aimed at closing the tax gap," according to a Treasury Department budget request. The measures would reap an estimated $1.3 billion in extra annual tax revenue by 2014.
But House Republicans voted to cut the IRS budget by $600 million in fiscal 2012. IRS Commissioner Doug Shulman told lawmakers that the proposed GOP cuts would cause tax collections to fall by $4 billion because they would require slashing the agency's enforcement budget.
We'll lose $4B by 'saving' $600M. I don't know about you, but that doesn't sound like good math to me.
===================================
#18 - I said "History, Clavos - and fairly recent history at that. History shows that a modest tax hike - and it is a MODEST tax hike - does NOT result in the worst fears of Chicken Little. As then, so now."
You replied, "Are you really that naive, Glenn?"
So would you care to show me a case in history where a lousy FOUR-POINT-FIVE PERCENT increase in taxes has resulted in the kind of Chicken-Little fears you've bought into?
Really, Clavos, is it that I'm naive? Or is it that you've listened to the fear-mongers for so long that you can't tell the difference between history and what they want you to believe?
===================================
#19 - REALLY? You use an editorial by a staff writer for the Washington Times (and who also works for the Drudge Report) to imply that the media as a whole is "beginning to advocate that the people not pay their taxes"???? That's something I'd expect of Warren, but not of you.
AND if you'll read the article with a critical eye, you'd see the same false premise the conservatives have used before, that of comparing the federal budget to a household budget. I addressed the fallacy of that premise in this article.
21 - Clavos
I'd really like to see you show me that trillion-dollar reference...
I linked it...um, them -- there are two.
22 - Clavos
Saying the media is starting does not imply "the media as a whole," or anything else but exactly what it says.
I gave you two (count 'em, two) linked sources for the estimated (which is the only means of measuring it at this time) size of the shadow economy; there are dozens more -- google it.
23 - Clavos
So would you care to show me a case in history where a lousy FOUR-POINT-FIVE PERCENT increase in taxes has resulted in the kind of Chicken-Little fears you've bought into?
First of all, It's not a "fear" on my part; I fully understand why people are doing all they can to avoid paying taxes when the government is on an insane spending binge while it threatens to tax the hell out of us.
I particularly resent Mr. and Missus Prez spending $4M of my moey to vacation in Hawaii next month. Nobody but me pays for my vacations, and nobody but they should pay for theirs, and that goes for every other government employee and CEO or company officer in the private sector -- Nobody's vacation should be paid for by anybody but themselves -- N.O.B.O.D.Y.'.S.
24 - Jet Gardner
Simply put-President Hussein Obama WON the election almost soley on the platform that the rich whould pay their fair share in taxes.
Boehner's refusal to face reality and his arrogance in refusing to acknowledge that fact are an embarrassment to us here in Ohio... you know the state that gave Obama the election (despite Karl Rove)
25 - Baronius
Warren has a weird kind of Cassandra thing happening. He writes about serious things in a way that makes it impossible for us to take them seriously.