|...vote for more of the same, get more of the same.|
Dr. J. will start with picking the bits of corn out of the crap sandwich.
- The current income tax rates awaiting Obama's auto-pen, as he's dining on shave ice as we speak, are permanent. Well, as permanent as anything is in Washington. The Damocles Sword hanging over our economy that is, "What will the rates be when the Bush rates expire" is no longer hanging over the economy's head. The 'permanence' of the current rates allows businesses to plan for the long term which is better for our economy than the stagnation caused by kicking the can for the last four years. Nobody wants a tax increase, but the lack of a sunset on the newly ensconced rates is the next best thing to making the Bush rates permanent. One less drag on the economy.
- Defense cuts have been spared the knife for two months. While even conservatives say that some gristle can be cut from defense, the sequester was a really bad deal for the safety and security of the US.
- The one-year 'doc fix.' Dr. J.'s a whore...sorry, but this would have been a disaster for your health care as more doctors and hospitals would have to either shutter their doors or further reduce the number of Medicare patients they see in order to keep things going. Dr. J. would love to get rid of the 'doc fix' go with the Ryan plan for Medicare and phase it out for Gen X and the Millenials, and go with market solutions, but that's another post for another day.
- Congressional pay freeze. They don't deserve a raise. Marsha Blackburn (TN-7) agrees with Dr. J.
- Expiration of the payroll-tax cut. Dr. J. HATES HATES HATES tax increases. That being said. he disagreed with the payroll-tax cut from day 1 as it wasn't passed with adjustments in Social Security benefits paid out. It was a deficit creator that did not stimulate the economy. An Obama experiment that failed. Proof that not all tax cuts are equal, especially ones with sunsets.
- The AMT patch is permanent. It is linked to inflation. The only rub is how is inflation calculated. Dr. J. has suggested in the past that we have been underestimating inflation, hopefully the patch doesn't do so as well, otherwise, we will enjoy 'bracket creep' and be back here in 5, 10, 15, or 20 years.
- The State Sales Tax provision was extended for a couple more years, Tennesseans, Floridians, Texans and others who live in sensible states with balanced budgets and no state income tax can breath a sigh of relief.
- These are all chump-change in the grand scheme of things, however.
- Let's cut the B.S. This is a tax hike.
- Elections have consequences a majority of folks voted for Obama and to keep the Senate under Reid's sway, now a majority of folks (77% according to the numbers) are seeing a tax hike largely due to the payroll tax holiday being allowed to sunset. Reap the whirlwind, bitches! How can this be good and bad? Well Dr. J. said before that in principle the payroll tax was a BAD idea because all it did was increase the deficit. Dr. J. would have cut the payroll tax IF he altered the social security pay out scheme. He also would have made sure that it was done in a way to keep it solvent. It also didn't help our economy appreciably (as it had a sunset and wasn't big enough for most folks to notice). Now individual behavior will act in an economy negative manner as individual spending will decrease. While the tax cut did not harm the economy beyond debt to GDP ratio acceleration, it did not help. The tax hike will negatively affect the economy however. It's like the headache from withdrawing from caffeine.
- The increase in the higher income tax brackets, capital gains, and inheritance will have negative effects for years to come with regard to continued stagnation, and even worstened unemployment. As we said before, employers can finally plan, and that includes planning not to hire folk.
- Unemployment benefits are extended. Now those folks who AREN'T GOING TO BE HIRED because teh ritzches aren't going to be hiring can continue to sit at home and play X-Box on their 55" LED TVs on Dr. J.'s dime. (OK, 46", but still...)
- First - THERE ARE NO REAL SPENDING CUTS. If the Republicans were going to crack and vote for ANY tax hike (falling off the so-called fiscal cliff was NEVER going to happen in any meaningful way) in the name of bipartisanship, they should have put forward real spending cuts and THEN tell Reid to go F%@* himself if he didn't accept them. They should have overreached and then keep repeating 'balanced approach' until people were blue in the face. The Democrats have this game down, the Republicans suck at it. The D's snookered Reagan with the Wimpy Argument*, and now they snookered some barkeep from Ohio who is lucky he kept his job as speaker, as he sucks at it. When it comes to wielding the gavel, Pelosi, Gingrich, and O'Neill are all his betters, even if Dr. J. didn't like two of the three. "You will know what's in the bill when it's past," is pure political gold. Dr. J. still can't believe she got away with that!
- Second, what Dr. J. calls the conspiracy of guilt. Remember when you wanted to be in that kid's club in your neighborhood, or you were rushing that fraternity, and you were told you had to steal a pack of gum from Old Man Johnson's drugstore? The Republicans did just that. The President wanted to break them and he succeeded. Team Boehner voted in a tax hike, period. It may be small compared to the alternatives, but after the election, there was no doubt that the choice was between a principled fight which probably would have been politically disastrous for the Republicans after the tax hikes and sequestration kicked in because they SHOULD HAVE been marketing since August that they passed everything and Reid is doing nothing with it. Reid is doing nothing with it. Reid is doing nothing with it. REID IS DOING NOTHING WITH IT. Reid should be allowing the Senate to debate, mark up, and vote on the legislation, and ultimately let it go to conference committee. That's how it works on Schoolhouse Rock, right? Nevertheless, the Republicans shifted in posture and said, "Taxes are going to go up, its all about damage control." That's where they needed to AMEND the Senate bill that McConnell came up by adding spending cuts and then forcing everyone's hand. People want a government that spends $0.99 for every $1 brought in, including for debt reduction. If they said OVER AND OVER (notice a pattern here) that real spending cuts, like Obama's real tax hike, is balanced, and now it's time to balance it, they still would have looked bad, but it would have been less bad, Dr. J. suspects.
- Lastly - Dr. J. learned a little bit about himself throughout all of this. When he learned that the income tax hike was going to be more than $450K rather than $250K he breathed a sigh of relief, and while he still felt it was wrong, he took solace in that it wasn't going to affect his family finances, and so doing gained an insight into how the class warfare game works. It isn't about OPPOSING those in another income bracket, and cheering for their suffering, but rather its power is the relief felt in knowing that this time, and perhaps only this time, the Eye of Sauron passed over you to gaze elsewhere. Pretty dark, pretty depressing, but it was one of the biggest insights to come out of this process for him.
* I'll gladly cut spending Tuesday for a tax hike today!