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Thursday, August 22, 2019

Editor's View

Thursday, December 13, 2012 by The Press in Opinion

Fasten your seat belts, 2012 is going to have a cliffhanger ending

If the Mayan calendar's end-of-the-world "prediction" doesn't kill us Dec. 21, surely the fall off the so-called "fiscal cliff" at the end of the year will.

If our elected officials, who spend more time on television explaining why they can't agree on a savings and spending plan than actually doing something about it, fail to avert the tax hikes coming Jan. 1, 2013, we all will be dangling from the edge as our 401k plans dwindle and our grocery bills double.

Without an agreement between the Republican House and the Obama administration, the fiscal "fall" will result in tax hikes, spending cuts and a decrease in the budget deficit.

Spending cuts in 2013 would include approximately $55 billion from the defense budget and $55 billion from domestic programs.

The spending cuts and decrease in the budget deficit sound good. Right?

Wrong!

According to the Congressional Budget Office, while the tax hikes and spending cuts would reduce the deficit by some $560 billion, it would also cut the gross domestic product by 4 percentage points next year, sending the economy into a spiraling recession.

I would like to know when the last recession ended and life got better for the average American family.

Without an agreement, tax rates would increase for everyone. An average middle-income family would give the government approximately $2,000 more in taxes.

Capital gains taxes would increase from 15 percent to 20 percent for most taxpayers, and dividends would be taxed as regular income.

According to Carl T. Shaffer, president of the Pennsylvania Farm Bureau, this increase would negatively impact farmers.

"Farmers are subject to capital gains in a variety of areas, including livestock, land and other assets," Shaffer said in a statement released Dec. 4. "The estate tax and capital gains tax not only cut into profit margins, they also threaten the future of farm families, who often have to sell off assets, animals and land to pay off burdensome taxes.

"In addition, farmers face the possibility of losing a popular tax break, which allows them to deduct a significant amount of the cost of farm machinery from their tax return during the year in which they make the purchase."

If the American farmer suffers, so too will the American family with higher food prices.

Without an agreement, the Social Security tax rate would increase from 4.2 percent to 6.2 percent.

This, along with other tax increases, would mean less take-home pay for the average American worker already struggling to survive between paychecks.

In addition, Medicare Part A taxes would increase from 1.45 percent to 2.35 percent for families earning more than $250,000.

Without a deal, Medicare rates paid to physicians would drop almost 30 percent starting New Year's Day.

How many doctors will continue caring for Medicare patients with that loss in income?

Let's face it, whether an agreement between the House and the Obama administration is reached or not, both taxes and spending are going to increase.

The back-and-forth between the opposing sides is just for show, and for votes in the next election.

We, the people, are just pawns in this game of one-upmanship.

As Founding Father Benjamin Franklin wrote in 1789," ...but in this world nothing can be said to be certain, except death and taxes."

We just might be unlucky enough to face both by the end of this month.

Deb Palmieri

editor

Parkland Press

Northwestern Press