“Taxmageddon,”

Discussion in 'Politics' started by clevergirl, Apr 27, 2012.

  1. clevergirl
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    clevergirl Gold Member

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    No two ways about it- short term tax cuts and a long term strategy to cut deficit spending is an absolute "have to"!


    Surviving ’Taxmageddon’ Without Maiming Economy

    The nation is hurtling toward what has been called “taxmageddon,” the enormous tax increases and spending cuts scheduled for the beginning of 2013. At around the same time, we will also be spending some more quality time with our old friend: the debt limit.

    No one can yet see a plausible way through the coming storm. But even though they are not particularly inspiring, paths away from catastrophe do exist.

    First, some brief background. At the end of this year, all the Bush tax cuts expire -- amounting to about $250 billion a year. The payroll-tax holiday, at more than $100 billion a year, ends too, as do expanded unemployment-insurance benefits. And we face other spending cuts of about $100 billion, from the sequester set up by the 2011 debt-limit deal.

    All told, this fiscal tightening adds up to about $500 billion -- or more than 3 percent of gross domestic product. The economy will be in no shape to handle that much of a squeeze. If we do nothing to reduce or stop it, the economy could be thrown back into a recession.

    As if that were not challenging enough, we are expected to bump back up against the debt limit, which currently stands at $16.4 trillion. Projections suggest we will approach the limit in the fourth quarter of 2012. Then, the Treasury secretary will take temporary measures to allow continued issuance of debt. The Bipartisan Policy Center estimates those actions will get us to February 2013 -- at which point we will hit the debt-limit wall. If the economy is weaker than expected, it will widen the deficit faster, and we’ll hit the wall sooner.

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  2. TakeAStepBack
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    TakeAStepBack Gold Member

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    It's call, "stuck between a rock and a hard place."

    I'm not a fan of tax increases. Of any taxation fo that matter. I read about this a few weeks back and, I can say, it could ver well be the straw that breaks the countries back. This taxation will increase revenue while systematically reducing private sector expenditure causing a "hockey stick" moment of mobility.

    It could also turn out to be the palce where deficit is numbed slightly, in exchange for economic growth.

    One thing is certain. We're approaching the crux of a monteary/fiscal crisis that can go either OK, or really really badly.
     
  3. clevergirl
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    clevergirl Gold Member

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    The last scenario where a deep payroll tax cut is applied to offset the Bush tax cuts expiring seems the best policy apart from a miracle boom prior to November...
     
  4. Lakhota
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    Lakhota Diamond Member

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  5. clevergirl
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    clevergirl Gold Member

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    @Lakhota- As per usual you miss the real point of the article so as to take a partisan position...
     
  6. TakeAStepBack
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    TakeAStepBack Gold Member

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    .......And you do not understand economics.
     
  7. chanel
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    chanel Silver Member

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  8. WillowTree
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    WillowTree Diamond Member

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    That's what democrats do. Raise taxes.
     

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