Don't Jump Off That Cliff Just Yet!Joanne Bamberger
Remember how tired you were about all the presidential election coverage? 24/7 cable news stories on President Obama and Mitt Romney. They’re on the campaign trail! They’re debating! They’re competing to see who is more mom friendly!
But now that Election 2012 is over, what is there for all those correspondents to cover?
Can you say “fiscal cliff?”
Just the mere mention of the phrase grabs everyone’s attention, so, of course, the media is playing up the hype of the scary sounding phrase. As a result, I’m almost ready to jump off that cliff. But what I find really frustrating is this — few are explaining what this “fiscal cliff” is. Are we really going to fall into a huge crevasse if Congress doesn’t get its act together by the holiday break? And if there’s such a huge precipice around the corner, why didn’t we hear any talk of this cliff during the 2012 campaign?
According to the Center for Federal Tax Policy:
“The fiscal cliff is the culmination of a decade of “temporary” tax and budget bills that have postponed resolution of key policy differences. Should the tax code be used to heavily promote income distribution or aim instead to raise revenue in the least distortive manner possible? How large should federal spending be? Should [The Affordable Care Act] be modified or repealed? Should there be a federal estate tax and if so, at what level? Should the payroll tax be reduced and if so, how should we fund Social Security and Medicare? What should Social Security, Medicare, and Medicaid look like as the population ages?”
So many questions, so little time. There’s no doubt that if Congress can’t get its act together, most of us are going to be paying more in taxes in 2013 and there will be many governmental spending cuts, including large cutbacks in the defense budget. Our elected representatives claim there is no common ground — the Democrats are going to have to give on social spending and Republicans are going to have to give on tax increases, especially for the wealthy. Both sides say, “No way!”
Plus, to make things even more complicated, there’s that little thing called the Alternative Minimum Tax , or AMT, that way more families will be subject to if Congress keeps acting like toddlers who can’t play nicely. Originally, the AMT was meant to be a way to prevent the super-wealthy from escaping any tax liability because of certain tax reductions available to them, but not those in the middle class. As incomes have increased over the years, even if buying power hasn’t, more and more families have ended up with bigger tax bills because of the AMT. For example, the AMT was never intended to reach two-income households with two or more children that fall into the $75,000 to $100,000 range. But without Congress doing something about the looming “cliff,” those families, and others, will see some unpleasant changes in their tax bill next year.
I know that sounds like a lot of money, but depending on where you live, that’s not exactly Richie Rich territory. The way it looks now, if nothing changes by the first of the year, many families will end up paying between $4,000 to $7,000 more a year as a result of increased income taxes and payroll taxes, and the loss of certain tax deductions.
Not a very nice way to send holiday greetings to the American public.
Do you think there’s an economic cliff looming for your family if Congress doesn’t start playing nice? If so, how is it going to impact your holiday? Or is this just Washington, D.C.’s way of previewing the fiscal issues for the 2014 mid-term elections?
Read more from me at my place PunditMom and in my Amazon best-selling book, Mothers of Intention: How Women and Social Media are Revolutionizing Politics in America.
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