There’s no official agreement, so everything you read here may turn out to be nonsense, but it appears that the misfits in Washington have reached a deal on the fiscal cliff.
It seems as though my prediction about the outcome was correct. Not that this makes me happy.
First, the good news.
…
…
…
Oh, wait, there isn’t any.
Now for the bad news.
- The top tax rate will increase to 39.6 percent for entrepreneurs, investors, small business owners, and other “rich” taxpayers making more than $400,000 ($450,000 for married couples). This is Obama’s big victory. He gets his class-warfare trophy.
- The double tax on dividends and capital gains will climb from 15 percent to 20 percent (23.8 percent if you include the Obamacare tax on investment income).
- The death tax rate will be boosted from 35 percent to 40 percent (which doesn’t sound like a big step in the wrong direction until you remember it was 0 percent in 2010).
- The alternative minimum tax will still exist, though it will be “patched” to protect as many as 30 million households from being swept into this surreal parallel tax system that requires people to use a second method of calculating their taxes – with the government getting the greatest possible amount.
- Unemployment benefits will be extended, ensnaring more Americans in joblessness.
- Medicare spending will be increased as part of a “doc fix” to increase reimbursement payments for providers.
This is sort of like a late Christmas present, but we must have been naughty all year long and taxpayers are getting lumps of coal.
That being said, I was expecting even worse, so this deal (assuming it happens) almost seems like a relief.
Sort of like knowing that you were going to have your arm amputated, but then finding out that at least you’ll get some anesthetic. You’re not happy about the outcome, but you’re relieved that it won’t be as bad as you thought it would be.
But let’s not delude ourselves. This deal is not good for the economy. It doesn’t do anything to cap the burden of government spending. It doesn’t reform entitlement programs.
And we may even lose the sequester, the provision that was included in the 2011 debt limit that would have slightly reduced the growth of government over the next 10 years.
What a dismal ending to 2012.
International Liberty 
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[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] And he partially succeeded with an agreement on how to deal with the so-called “fiscal cliff.” […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] And he partially succeeded with an agreement on how to deal with the so-called “fiscal cliff.” […]
[…] And he partially succeeded with an agreement on how to deal with the so-called “fiscal cliff.” […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
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[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
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[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
[…] in the postscript, most of that occurred when some of the Bush tax cuts were made permanent by the “fiscal cliff” deal in 2012) and raised taxes by $1.32 trillion (most of that occurred as a result of the […]
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[…] This is a positive step, effectively wiping out the tax-rate increases imposed by Presidents George H.W. Bush, Bill Clinton, and Barack Obama. […]
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[…] Obama imposed higher income tax rates on upper-income taxpayers as part of the fiscal cliff deal. […]
[…] questions started after I said the fiscal cliff was a smaller loss than I expected. Then people wondered what was going on when I wrote that we should celebrate the sequester […]
[…] in addition to the big fiscal cliff tax hike from early last and the (thankfully smaller) tax increase in the Ryan-Murray budget that was […]
[…] in addition to the big fiscal cliff tax hike from early last and the (thankfully smaller) tax increase in the Ryan-Murray budget that was […]
[…] The fiscal cliff was a smaller loss than I expected. […]
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[…] he miscalculated in thinking that the fiscal cliff tax hike somehow meant that he had permanently neutered the GOP, and he definitely goofed when he tried to […]
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[…] Grading the Fiscal Cliff Deal: Terrible, but Could Be Worse […]
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[…] The fiscal cliff was a smaller loss than I expected. […]
[…] The fiscal cliff was a smaller loss than I expected. […]
[…] This trend actually started with the fiscal cliff, though that was simply a smaller-than-expected defeat. […]
[…] This trend actually started with the fiscal cliff, though that was simply a smaller-than-expected defeat. […]
[…] The fiscal cliff was a smaller loss than I expected. […]
[…] questions started after I said the fiscal cliff was a smaller loss than I expected. Then people wondered what was going on when I wrote that we should celebrate the sequester […]
[…] questions started after I said the fiscal cliff was a smaller loss than I expected. Then people wondered what was going on when I wrote that we should celebrate the sequester […]
[…] questions started after I said the fiscal cliff was a smaller loss than I expected. Then people wondered what was going on when I wrote that we should celebrate the sequester […]
[…] Equally worrisome, the budget assumes that the federal tax burden should remain about 19 percent of GDP, higher than the long-run average of 18 percent of GDP and – for all intents and purposes – permanently enshrining Obama’s fiscal cliff victory. […]
[…] miscalculated in thinking that the fiscal cliff tax hike somehow meant that he had permanently neutered the GOP, and he definitely goofed when he tried to […]
[…] he miscalculated in thinking that the fiscal cliff tax hike somehow meant that he had permanently neutered the GOP, and he definitely goofed when he tried to […]
[…] he miscalculated in thinking that the fiscal cliff tax hike somehow meant that he had permanently neutered the GOP, and he definitely goofed when he tried to […]
[…] Financial blogger Dan Mitchell summed it up best: Grading the Fiscal Cliff Deal: Terrible, but Could Be Worse. […]
[…] Financial blogger Dan Mitchell summed it up best: Grading the Fiscal Cliff Deal: Terrible, but Could Be Worse. […]
[…] STORY HERE […]
Dan, please update your post, or better yet, repost most of it as a new (but after-the-fact, and after-reading-the-157-page Senate bill) and slightly revised post on 1 Jan 2013. I’d like to pass along a link to friends who are asking, but don’t want to use one that was still projecting what was coming.
Thanks for your good work.
So where are the spending cuts? I was expecting at least one dollar cut for any new tax dollar!
And Believe me wayne, 2014 will be the year to kick them all out.
The misfits have kicked the can down the road again………..and so forth, alas! Just as I thought they would do from the beginning. We will never get anything different from them. The only way to solve this problem is to put every incumbent out of office every election.
Amen, brother.