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America is Poised to Go Over the Fiscal Cliff

By Brandon Moseley
Alabama Political Reporter

The Senate adjourned Sunday evening without voting to pass anything to address the fiscal cliff crisis which threatens to raise taxes on almost all American workers.

Every tax bracket will pay more taxes in 2013 than they did in 2012 and many more Americans will pay income taxes.  A Social Security tax increase and drops in several tax credits will affect almost everyone including low wage earners.  Automatic sequestration cuts that target America’s defense will leave tens of thousands of defense workers jobless as well as many of our active duty armed forces if the cuts are allowed to be fully implemented.  Nondefense government agencies will see cuts as well.  Inheritance taxes will increase exponentially if we go over the cliff.  If we go over the fiscal cliff, the estate tax exemption will drop to just $one million. Anybody who leaves more than that to their families will lose 55% of that estate to the government.  That increase alone would make it almost impossible to leave a successful farm or business to your family’s next generation without extensive and expensive estate planning. Republican and Democrat negotiators appeared close to a deal Sunday, but that apparently all fell apart in the late afternoon.  Both sides will meet again on Monday to attempt to craft some sort of a package that is palatable to both sides.

Rep. Jo Bonner (R) from Mobile wrote to constituents, “As I pen this column, lawmakers are preparing to return to Washington, Sunday, December 30, for down-to-the-wire negotiations and a possible vote to avoid the “fiscal cliff”.  On January 1, taxes will automatically increase on all Americans if Congress and the president do not reach an agreement.  Add to that another $500 billion in cuts to defense spending if no deal is struck and the risk of another painful recession is significant.”

House Republicans have already passed bills which would fix both the fiscal cliff crisis and the sequestration crisis.  Rep. Roby (R) from Montgomery said, “The House has already passed two bills that, together, would prevent the ‘fiscal cliff’ crisis: one bill to keep tax rates low for all Americans, and another to stop harmful cuts to the military.  It is now time for the Senate to participate in this process. Grandstanding on the Senate floor and ducking responsibility won’t do anybody any good. The House will return on Sunday prepared to consider the Senate’s plan, but they have to act before we can move forward.”  No bill has passed the Senate or even been voted on as of press time as the two parties have not been able to come to any sort of agreement.  In fact it has been almost four years since the U.S. Senate even passed a budget.

Rep. Bonner said, “On Thursday, Senate Majority Leader Harry Reid taunted the House for its refusal to go along with President Obama’s plan to raise taxes on America’s small business owners – a plan the accounting firm Ernst & Young has already estimated will cost 700,000 jobs.  For standing up to tax hikes on those making more than $250,000, and for supporting an alternative plan to keep taxes low for ALL Americans, House Speaker Boehner was labeled a “dictator” by Senator Reid.  Perhaps Senator Reid is still suffering from an eggnog hangover.  He surely has forgotten that his own Senate has refused to pass two separate House bills to prevent tax increases and to make responsible federal spending cuts.  Hasn’t Senator Reid’s Senate also failed to pass a budget in three years?  The House has passed two successive budgets since January 2011 and more than 30 jobs bills – all of which the Senate has ignored.  Rather than lecturing House conservatives, Mr. Reid’s “do-nothing” Senate should finally do its job and work with the House to find a solution that does not punish hardworking Americans or job-creating small business owners.”

A plan to create a new “millionaire’s tax” that would raise taxes on Americans who make $one million or more failed in the House in December when it could not get enough votes.  Moderate Republicans favored that plan because it would have moved closer to President Obama’s demands that the rich give the government more of their money.  Obama and the Senate Democrats had already dismissed that compromise plan as not going far enough.

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Speaker John Boehner (R) from Ohio said, “The lines of communication remain open, and we will continue to work with our colleagues to avert the largest tax hike in American history, and to address the underlying problem, which is spending.”

Brandon Moseley is a former reporter at the Alabama Political Reporter.

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