Comments on: The Cliff Deal in the Offing

By: purple

purple — Wed, 02 Jan 2013 06:07:52 +0000

There is a cap at $110,000 but there is also a cap on benefits.

If you look at Social Security pay outs, they are decidedly progressive.

By: purple

purple — Wed, 02 Jan 2013 06:02:14 +0000

The payroll tax holiday was an awful compromise to begin with, as it fit right in with starve the beast. Now Dems are going to reap the whirlwind of that awful compromise, as Republican cries of tax increases are going to mesh well with what Joe Six Pack sees in his paycheck. And I’m pretty sure the majority of Americans forgot there even was a payroll tax holiday, they will just notice a smaller paycheck in 2013. Probably the majority can’t read all the fine print on their stub to begin with (not being elitist, just factual).

Ugly times ahead in two months.

By: rjs

rjs — Wed, 02 Jan 2013 05:42:04 +0000

havent seen anything about renewing the Mortgage Forgiveness Debt Relief Act…
that would mean mortgage debt forgiven in short sales will be treated as income and be taxable in 2013…

here’s the sausage: http://www.scribd.com/doc/118551686/Mat-12564 (157 pp)

By: Jared Bernstein

Jared Bernstein — Wed, 02 Jan 2013 05:27:19 +0000

It’s $110 bn in 2013. So real money and an unfortunate loss in stimulus when we still need it–many workers paychecks are already pinched. Raising cap of course makes sense–it’s not good that this option dropped out of tax debate–a failure by progressives.

By: readerOfTeaLeaves

readerOfTeaLeaves — Wed, 02 Jan 2013 05:21:45 +0000

Agree.
But then, the wealthy Dems that I know travel a fair amount and have zero interest in living in a nation that has become a Banana Republic. They’ve seen more than enough of that in other places on the globe. The folks that I know are far more focused on living in a healthy society than obsessing over specific tax rates and loopholes.

By: T

Wed, 02 Jan 2013 05:20:18 +0000

“Unless the President is willing at that point to tell his Treasury Secretary to go forth and borrow as needed”

That to me is the biggest weapon in his arsenal. I keep hoping against hope that he will use it…I just don’t think it’s very likely.

By: David in Cambridge

David in Cambridge — Wed, 02 Jan 2013 04:53:39 +0000

Jared, if we dropped the payroll withholding back down to 4.2% from 6.2%, how much revenue does that represent? Could we make that cut revenue-neutral by:
– subjecting earned income above $110,000 to the full payroll tax or some fraction thereof?
– leaving a donut hole and subjecting earned income above some other threshold (perhaps $250,000) to the full payroll tax or some fraction thereof?
– subjecting investment income above some threshold (perhaps $250,000) to the full payroll tax or some fraction thereof?
– some combination of the above? And what would your ideal scenario be?

And how stimulative would any of the above be relative to leaving the withholding at 6.2% for earned income below $110,000?

I always hear grumbling about how silly the $110k cap is, but there never seems to be any serious discussion about changing it.

Thanks, and Happy New Year.

By: fausto412

fausto412 — Wed, 02 Jan 2013 04:46:35 +0000

nor I. It would be idiotic to do that.

I heard my CEO go on the record as wanting that. Something wrong with businesses parking money overseas waiting for a tax break but it would be even more wrong to let them bring it over with a tax break.

By: Bumpa

Bumpa — Wed, 02 Jan 2013 04:42:30 +0000

…or so I’ve heard.

By: Bumpa

Bumpa — Wed, 02 Jan 2013 04:40:55 +0000

House vote is Wednesday