- Posted November 28, 2012 by
This iReport is part of an assignment:
President's Call for a 'Balanced Approach' Not the Whole Story
The fiscal cliff is now in sight and no one wants to go plunging over the edge...at least that's what all the politicians in Washington DC are saying. Whether in the White House or in Congress the talk is a way must be found to avert crashing over the edge.
Here's the reality. The latest poll says that 60% of the nation wants taxes increased on the rich. Rich is being defined as individuals making $200,000 per year or more and couples making a combined $250,000 per year or more. Of course when you use the term rich, depends on where you are on the economic ladder what is considered rich. For people like me not even able to get to the ladder, anyone making $30,000 to $50,000 per year is rich!
There are other polls which state that between 20 to 25% of the people think taxes should go up on everyone. These folks have no problem with the Bush/Obama tax cuts not being extended.
President Barack Obama, as he stated in his news conference today, is looking for a "balanced approach". Of course the only thing the President is talking about is raising tax rates on the rich. He said it was not fair and was not a "balanced approach" to let the rich folks not pay more in taxes. The President said the balanced approach was to make sure the tax cut extension should be kept for the middle class immediately and worry about the rest of the fiscal mess some time next year.
What the President is not talking about is that everyone who works for a living will see a tax increase come January 1 whether the rich get taxed more or not. The much hyped $40 savings in your paycheck from last year is going down the drain. That's right the payroll tax cut will not be extended. No one in Congress or the White House is putting an extension for those taxes on the table. So, no matter whether you are low income, middle class or rich, if you get a paycheck, come January you will see an increase in your taxes.
What else is not being talked about is how the dividend tax will also be going up come January 1st unless Congress and the President come to an understanding. For millions of seniors, on fixed incomes, an increase on the dividend tax could have a real impact on their lifestyle. Many seniors depend on these dividends to buy their medicine, supplement their Social Security, buy groceries and live independently. For these seniors, most in the middle class, they are staring down a double barreled shotgun.
Then there's the alternative minimum tax rate which if not addressed will also be rising substantially. Millions of middle class small business owners and others will see a sharp increase in their tax burden which may have a major impact on their ability to operate.
Let's not forget also at issue is the much maligned capital gains tax. That tax is set to rise from 15% to 20%. Plus add to that the extra taxes that take effect from the Affordable Care Act. Which means that the ballyhooed raise in rate to 39.6% is actually much higher. The real rate will be about 43% in January plus those investments which are funded by money already taxed previously as income will be taxed again at a 5% higher rate.
So far, all I am hearing about the "balanced approach" is extending the Bush/Obama tax cuts for the middle class and raising the rate on the rich. I am not hearing anything about cutting spending or reining in the cost of the government doing business.
Where's the balance?
I am not opposed to the rich paying more. What I am opposed to is calling the method balanced or fair when the only thing on the table is a rate hike for only one group of Americans with no address of the deficit and spending cuts.
The President today in his news conference said the revenue raised from a rate hike on the rich would be used for education and infrastructure. That's not what he said on the campaign trail when he said it would go toward getting the deficit under control.
Instead what we got today was more talk about more spending.
I do, however, believe, as some Democratic lawmakers stated last year that the rate hike should not kick in until at least $1 million. There are too many making $200,000 per year living in high cost-of-living areas that will be affected. Reality is these folks are middle class, not rich.
From the Cornfield, if we are going to have a "balanced approach", we need to be talking about everything - not just increased revenues from the rich. We need spending cuts. We need Medicare, Medicaid and Social Security reform. We need cuts in the Defense Department. We need cuts throughout the federal government.
Increase revenue? Not a problem, but the increased revenue must be managed properly. To date, Congress and the Executive Branch have proven to be poor stewards of the nation's finances.