Wishing you all a healthy, prosperous New Year!
The “Cliff” … have we fallen or have we risen?
I’m looking up but do not see much daylight. I know my payroll taxes have risen by 2% this week. That is fine. The previous rate was 6.2% and was lowered by 30% to 4.2% during the late stages of the last recession. I do not mind lawmakers allowing that to expire.
BUT it raises taxes by 2% for EVERY working American. Those single taxpayers earning $400,000.00 per year ($450,000.00 for couples) will have an additional 4.6 percent added to their tax burden, bringing the rate to 39.6% (41% with the looming phase out of various deductions) from 35%.
Capital gains tax rate has also been increased from 15% to 23.8% (3.8% is the ObamaCare surtax).
According to the 1/2/13 Review & Outlook in the Wall Street Journal:
“As for small business, the overall tax increase this year is substantial. The new listed top rate of 39.6% doesn’t include the phase out of deductions that will actually take the rate to 41% or so for many taxpayers (those earning as singles $250,000.00, $300,000.00 filing jointly… a hidden marginal tax rate increase).
“Add the ObamaCare surtaxes on investment income ( 3.8 % ) and Medicare ( 0.9% ), as well as the current Medicare tax of 1.45% ( employee share ) and the real top marginal tax rate on a dollar of investment income from a bank savings or money market account will be about 46%. Throw in state taxes and the marginal rates in many places will be in the mid 50% or higher range.” Did you say “American Taxpayer Relief Act of 2012???”
While busy averting the cliff, legislators managed to help a few friends with tax breaks totaling some $40 billion;
- $248 million to Hollywood (they need it)
- $59 million for cellulosic ethanol, or algae based fuel (they need it, I never heard of it…)
- $12 billion in continuing credits to the wind energy industry (I guess they need it too)
- $78 million in accelerated write-offs to NASCAR track owners (they really need it)
- $222 million for rum rebates to distillers (for sure…they need it)
The list goes on and on. It appears our government is hell bent on spending more money, to hell with balancing the budget, hell, to hell with even submitting a budget, to hell with fiscal restraint, to hell with reforming the tax code, to hell with creating a process to cut government spending. I don’t know about you, but I don’t like it.
The country will survive in the short term. In the long term, not as we know it if this type of governance continues. In 2013 the government will be larger, our fiscal problems even more urgent.
Regarding the relief for those affected by Hurricane Sandy, House Speaker, though wrongly vilified for doing so, was in fact DOING THE CORRECT AND RIGHT THING FOR AMERICA by refusing to vote on the $60 billion dollar bill submitted by the senate. Why? The following PORK was included in the $60 billion request:
- $158 million for Alaskan fisheries
- $2 million for roof repair at the Smithsonian in Washington.
- $17 billion (yes, with a B) for liberal activists, under the guise of “community development” funds and so-called social service grants.
All American taxpayers should THANK Mr. Boehner for having the GUTS to take a stand in order to separate the unnecessary PORK from that which is necessary relief.
Anyway, let’s see if we can find some encouraging news from this short holiday week…..
The Institute for Supply Management reported its purchasing manager’s index increased from 49.5% in November to 50.7 % in December. The reading was its highest in four months and exceeded expectations. This indicates expansion for manufacturing for the third time in the past seven months but did move manufacturing off its 2012 low point in November.
The New Orders Index remained steady indicating growth for the 4th consecutive month.
The Production Index decreased indicating growth in production for the 3rd consecutive month.
The Employment Index increased indicating a resumption of growth in employment.
Both the Exports and Imports Indexes increased returning both indexes to growth territory.
According to the Federal Reserve Bank of Philadelphia manufacturing in its region expanded in December.
According to the Federal Reserve Bank of Richmond the manufacturing sector in the Atlantic region expanded in December.
God Bless America….. please