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  • There are no tax cuts in the fiscal cliff deal!

    Our new US Senator, Joe Donnelly, said that we must now focus on cutting spending now that we have cut taxes for 98% of Americans. That is an interesting interpretation of the deal to avert the so-called “fiscal cliff” that Congress signed at the last minute. It is interesting because it is completely counterfactual.

    The fact of the matter is that there are no tax cuts in this deal. What Congress decided to do was keep the tax rates that were signed into law by George W. Bush in 2001 and 2003. No one will see the amount of money deducted from their paycheck actually go down. Only in Washington doublespeak is not increasing taxes called a “tax cut.” Shame on the Republicans for allowing Democrats to get away with this nonsense.

    Instead, the “fiscal cliff” deal was a tax increase on upper-income earners, in addition to the expiration of the payroll tax holiday for Social Security taxes. In the name of “compromise,” Republicans in the House and Senate broke the defining principle of the Republican Party for the last 20 years when they agreed to increase tax rates on the rich.

    This is significant. As Rush Limbaugh has been pointing out for weeks, Barack Obama has been determined to get Republicans to agree to a tax increase on upper-income earners. It wasn’t enough to go over the cliff and then pass rate reductions on the middle class. No, Obama needed to get Republicans to fold on tax increases for the rich, as an admission of guilt for the economic mess. The political impact of this confession is and will be significant, especially the next time a Republican runs for President on a platform of lower taxes.

    Obama claims to want a “balanced” deal, but this is anything but balanced. As both Breitbart.com and Michelle Malkin have pointed out, there are $41 in tax increases for every $1 of spending cuts in this deal. If you are looking for “balance,” this is not it.

    This is assuming the spending cuts ever come, which will not happen. Even if the cuts do happen, they will be too small to make a difference. It sounds great to cut $1 trillion from the budget over ten years, but that is only $100 billion a year. When our annual budget deficit is well over $1 trillion – every single year – then cutting less than 10% of that will not get the job done. So we keep careening toward financial collapse, with no one in Washington making any serious effort to stop it. This does not bode well for the future.

    Scott Tibbs blogs at ConservaTibbs.com. Follow him on Facebook, Twitter, Tumblr and Google Plus.

    This post was tagged under: barack obama, Bipartisanship, Budget, Congress

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