To the Editor:
Both political parties say with a straight face that the other party is to blame for the “fiscal cliff” that we will face come Jan. 1, 2013. The truth is that neither party was willing to compromise during the Bush tax cut negotiations last fall, and a bipartisan group voted to approve the sequestrations. They are both to blame for the state of affairs we find ourselves in now.
I am staggered at the comment made by Sen. Patty Murray (D-Washington), member of the Senate Budget Committee, announcing the fact that the Democrats are willing to allow the country to sail off this cliff unless they get their tax increases on the “rich.” The tax cuts were actually given to all taxpayers, but Democrats refer to them as tax cuts for the “rich.” The rich already pay a disproportionate share of income taxes. The top 1 percent pay 38 percent of all tax revenues while earning only 20 percent of all income generated).
Whether or not this is fair is an argument for another day. Regardless, the result of the expiration of these tax cuts will be severe economic contraction in an already stressed economic environment. Here is what will happen:
• Your income taxes will go up. Those in the lowest brackets will see the greatest percentage of increase.
• If you are married you will pay more taxes than two single people with the same income.
• The phase-out rule for itemized deductions will return for many people. The more you make, the less you can deduct.
• The phase-out rule for personal exemptions will return for many people. The more you make, the less your personal exemption will be.
• Taxes on long-term gains and dividends will increase for everyone.
• The current renditions of the child tax credit, earned income credit, dependent care credit, and adoption credit will expire, thus increasing the tax burden on many people who can’t afford it.
• The inflation indexing of the Alternative Minimum Tax will expire, ensnaring many more middle and lower income people in its odious tentacles.
• Medicare expenditures will be drastically reduced.
• Defense spending will be reduced to the lowest level since WWII, resulting in the inability of the U.S. to respond strongly to a serious threat from any source.
In a nutshell, if these tax cuts are allowed to expire expect to pay substantially more so your government can keep up its spend thrift ways. Democrats and Obama only talk about raising taxes. Had enough? I have.