WASHINGTON, December 28, 2012 — Get ready: We are going over the fiscal cliff, thanks to no compromise in Washington, and it is going to hit your wallet hard in 2013. Really hard.
True, Congress and the President even now are rushing back to Washington to keep America from going over the edge, but it may be too late.
Want to know just how much Congressional obstinacy is going to cost you as of January 1? There are several ways to figure it out. One comes to you courtesy of the Tax Policy Center’s Tax Calculator, which will tabulate your added tax burden when the Bush tax cuts expire and your payroll (Social Security) tax also increases.
Calculate What the Cliff Will Cost You Personally
The calculator asks you a series of questions about your income, deductions, etc. and then gives you a fairly accurate assessment of what the cost will be. Just click on the word Tax Calculator and give it a spin, although the cost will make you dizzy, if not down right nauseated.
One calculator that I like better comes from CreditCards.com, a site that asks only a couple of questions that you can do in about 30 seconds, giving you nearly the exact same tally. If you love simplicity click on CreditCard.com but again be prepared for a shock.
If you want a rough estimate, you should know that the Tax Policy Center says 90% of American households will now face higher tax bills, so that probably means you.
A married couple making between $20,000 and $30,000 a year will see $1,423 fly out of their pocketbook. People with incomes close to $100,000 could face a $4,000 bill, while middle-income families, making between $40,000 and $65,000 a year, will be hit with a $2,000 tax bill.
That $2,000 could mean one or two months’ mortgage payments or four months of groceries for some families, a big hit for the middle class. The White House has a hash tag, #MY2K, that recruits Americans to post what that $2,000 could have done for them if the fiscal cliff had been avoided. One person wrote that $2,000 “is keeping this house and keeping it warm for my growing family this winter.” Or go the White House web site and tell your story by clicking on White House.
Why Did the Deal Fall Through?
But why is this even happening? What went wrong? It had looked like President Obama and Majority Leader John Boehner (R-Ohio) were just inches away from a deal when Boehner turned up with Plan B or extending the tax cuts up to $1 million, after realizing that Plan A (the one he and the President had hammered out) had a snowball’s chance in the proverbial hell. However, what he didn’t count on was the House Tea Party Caucus looking at Plan B with contempt and letting him know that they were not going to raise taxes on millionaires. No way, no how.
Of course, the big question is, can’t Boehner and his lieutenants even count votes? You never bring a bill to the public square until you know behind closed doors that you have a majority of your party’s vote in hand. No matter, Plan B would never have flown with Democrats in the House or Senate. Democrats only favored a tax hike on those making $250,000 or more. Also, what spending cuts were the Republicans going to put on the table? Talk about a shell game. Now you see GOP cuts and now you don’t.
Right now things look bleak for Americans. If we tumble over the fiscal cliff, not only will your wallet grow thinner, your stocks, 401Ks, or wherever you have invested your savings are in danger of plunging as well.
Is This TARP All Over Again?
Just think back to 2008 when Congress, read mostly Republicans, wouldn’t pass TARP, initiated by President George W. Bush: the stock market plummeted nearly 800 points in one day. Guess who got the message and finally did pass TARP? Is that what’s in store for us again?
If you believe in political miracles, think again: this is Washington D.C., the Beltway, where dysfunction is the name of the game, not miracles.
The Republican Party, thanks to the gerrymandering within states, has been hijacked by Tea Partiers who are ready “to primary” (to run red meat candidates against “moderates”) any Republican voting against the orthodoxy, in this case, Grover Norquist’s no more taxes pledge.
On “Fox News Sunday with Chris Wallace,” Sen. John Barrasso (R-Wyo.) said that he thought that we will definitely fall out of the fiscal tree rather than fall over a cliff, but he laid the blame squarely on President Obama, insisting “I believe the president is eager to go over the cliff for political purposes. He senses a political victory at the bottom of the cliff.”
Can the GOP Afford Brinkmanship?
Actually the American people already know whom they will blame when this happens and it is not Democrats or the President. According to poll after poll, it will be the Republicans. Can the GOP afford this kind of hit? Apparently it thinks so, even though such obstinacy will lead to a tax hike on everyone and not just the wealthy few that the Republicans were trying to protect.
When you realize that a new Congress, after our plunge headlong into the fiscal abyss, will most likely reinstate the tax breaks for the middle class sometime in January, then you have to wonder: “What the heck are the Republicans thinking? Or are they even thinking or acting from their gut?”
There are practical Republicans out there who understand the implications of this doomsday scenario that Tea Partiers are ready to play out. “It weakens the entire Republican Party,” Congressman Steven LaTourette, (R-Ohio) told the Associated Press. “I mean it’s the continuing dumbing down of the Republican Party, and we are going to be seeing more and more as a bunch of extremists that can’t even get majority of our own people to support policies that we’re putting forward.”
The fiscal cliff could be the GOP’s Waterloo or its tipping point with the electorate. People are tired of brinkmanship politics. Even Republicans are tired of the Right Wing antics. Boehner must be bone-tired of them. It makes you wonder why he even wants to stay as their Speaker anymore.
As Rep. La Tourette said, “If you’re not a governing majority, you’re not going to be a majority very long.”
So it’s time for Americans to call their Representatives and Senators — both Republicans and Democrats — and give them an earful. Perhaps we can make Congress work for us if we push them to edge. If not, then be prepared to take a page from the Tea Party play book and “primary” them in 2014.
To contact Catherine Poe, see above. Her work appears in Ad Lib at the Communities @ WashingtonTimes.com. She can also be heard on Democrats for America’s Future. She is also a contributor to broadcast, print and online media.
This article is the copyrighted property of the writer and Communities @ WashingtonTimes.com. Written permission must be obtained before reprint in online or print media. REPRINTING TWTC CONTENT WITHOUT PERMISSION AND/OR PAYMENT IS THEFT AND PUNISHABLE BY LAW.