Opinion: Why the Fiscal Cliff is Good for America
By Avi Solomon. As most of America waits to see if Congress and President Obama allow our country to go over the fiscal cliff, I eagerly hope that we do go over the “so called” fiscal cliff. No, I have not become a Democrat who loves to see the rich paying more taxes so that more Americans live off the welfare system. I am looking at the long term picture of this country assuming mashiach doesn’t come tomorrow.
American currency hasn’t been backed by gold since the days of President Nixon who took the country completely off the gold standard. Instead, the only thing that gives a dollar any value is the confidence that people have in the stability of the American government. If America doesn’t get its deficit under control and learn to spend less, then we will eventually become like Greece, which is in shambles.
The only realistic way to tackle the deficit is by raising taxes on as many people as possible along with painful cuts.
Thus, while I disagree that the wealthy or any Americans should pay a high tax rate I see it as a necessity to get us out of the mess that Bush and Obama got us into.
I acknowledge that going over the fiscal cliff will cause economic hardships for the country, but I believe the long term hardships that this country will face if we don’t deal with the deficit and out of control spending are by far much worse.
It is for this reason that, with a heavy heart, I hope we go over the cliff.
There are 35 Comments to "Opinion: Why the Fiscal Cliff is Good for America"
always loved sky diving. cant wait to fly.
no more free stuff
Quote “The only realistic way to tackle the deficit is by raising taxes on as many people as possible along with painful cuts.”
Utter nonsense , the whole problem is not taxes its SPENDING!!!!!!!!!!!
if the morons in congress do not fix this problem ,just wait and see the economy go into recession .Everyone is going to be hurt by this!
The problem is the spending.
Do you know that one of the issues that is preventing the extension of the Bush tax cuts (as of approx 2 hours ago) is that Obama insists that any taxes on the wealthy be used for NEW spending, not deficit reduction.
Obama hasn’t a clue what the deficit is going to do to our beloved country. Well, maybe he does, but he doesn;t care. He wants higher taxes on everyone, more spending, and then he’ll blame the coming recession on the Republicans. And Americans will fall for it, as usual.
to Yid says:
You are 100% correct !!!!!!
You cannot keep spending money you dont have !!!
We dont have to worry about another country defeating us on the batttlefield ,we will do it to ourselves right here at home !!!!
Obama has no clue as to what the deficit is, he was asked in an interview with CBS what the deficit amount was and he couldn’t answer the question. He wants defence cuts and higher taxes on the rich, period. The tax money from the rich will only bring enough money to run the government for 8 days. That will not solve the budget problem it will only create class warfare, get the rich and punish them for their success! That is a poor way to lead the country.
I can’t disagree more. Avi you are looking at our country as if we are currently sinking and only the wealthy have the life boats of money to bail us out so that justifies robbing them. In essence you are justifying socialism just at a point where it’s necessary for all. Case in point, once communism caused the whole country to be poor from that point and on communism was justified. Our country was based on the principle of every person is entitled to advance their own interests and government can not rob wealthy citizens to help others. If there isn’t enough spending must be cut to the bare essentials and welfare programs entitlement programs are not a justification to rob. If government spending is cut to what it should be we would be out of the deficit!. As per your hope that we go over the cliff although sadly, with all do respect you sound childish it might not affect you much giving you the liberty of entertaining the thought however to myself and alot of taxpayers we really would not appreciate the rocky ride smart guy! We have alot to lose! Respectfully, A lakewood kollel guy who happens to pay alot of taxes.
I thought we went de facto off gold standard in the early 30s.
Anyway, too many people here are hung-up on welfare. Welfare is really not such a big issue in real America. Very few outside of Lakewood are on the dole. If they are, then they take it b’ztina, because I never saw it before I came here, where it is taken b’farhesia, as if it were a matter of right.
You cannot define this nation by our own parochial experience. There are many among us, true blue Americans, who never took a hand-out from the government, our father in-law or anyone else, but who want our government to help those in need.
What kind of country do we want? Do we want people on the street or roaming (or being driven) house to house for their sustanace or do we want a safety net where those less fortunate can live with some measure of dignity?
Quote ” Very few outside of Lakewood are on the dole. ”
well that depends on what you consider the “dole”
with 47 million on food stamps (yes thats a handout!!) I would not consider that “VERY FEW PEOPLE”
What’s wrong with rich people paying the same tax rate as everyone else? Why should a millionaire only pay an effective tax rate of 12 or 15% when the rest of us pay more? And that’s only on what they can’t hide!
If there would be a system of Making people on the dole show that they are taking courses, getting job interviews etc…. Than perhaps welfare would make sense. But in its current state it’s just a free ride off your taxpaying neighbor.
So Avi going off the cliff is a good idea…Well why dont we see what can happen if we do go off the cliff…and no I am not refering to Taxes and spending cuts(which will hurt my brother because of handicap funding). Lets look at the stock market which most people are invested in..IF we do “fall off the cliff” we can expect at least a 20% drop in stocks at least 4-5% higher unemployment which will snowball even more drops in stocks so in theory you may be right that we need a better tax and spend government. But wishing to do it this way is FOOLISH!
Also if Boehner was at all competent he would be talking all day how Obama wants to use the tax hikes to fund more spending and not cut the deficit. He also should talk about Obama trying to get Pharaoh like powers in controlling the debt ceiling.
so all you people who voted obama in
now you pay more taxes !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
you got what you asked for so dont complain
To A Lang: Franklin Roosevelt took us mostly off the gold standard, but Nixon took country entirely off gold standard.
Also, the deficit is so big that spending cuts won’t do the trick alone.
MR. Lang, I have to respectfully disagree with you. If you look at statistics I am sure you will find that HUD, food stamps and wic do not only exist in Lakewood NJ.
Yes, a decent society should have a safety net for people who go thru difficult times, which could happen to anyone. but when it becomes a way of life– that is not fair to the people who are being taxed to fund this, nor is it healthy for the very people that are in essence being imprisoned by this lifestyle, with no push to improve themselves and their lot in life.
I agree it would only help the welfare crowd if the republicans gave in and Obama would be the winner, furthermore it is patriotic to support going off the cliff.
“What’s wrong with rich people paying the same tax rate as everyone else? Why should a millionaire only pay an effective tax rate of 12 or 15% when the rest of us pay more? And that’s only on what they can’t hide!”
tell the whole story here ,income earned on investment is taxed at a different rate for EVERYONE not just the rich !!!!!!
Well since we all don’t like paying taxes, and there is nothing more American than that, let’s get rid of the AMT first. Too many middle class people are now paying it.
Avi, I enjoy your work, except for all the anti-Democrat stuff. Political affiliation is passed down the generations and has no bearing on what side of any issue anyone takes. Kind of like being a Yankee fan ‘cuz your daddy and granddaddy were Yankee fans (it’s no joke, this is what studies of political behavior find). The two-party system makes this country strong and both parties have to be open to anyone of any persuasion. Remember that our parties election oriented, not issue oriented.
How did you get into Rutgers from Lakewood? It took pulling teeth to get another fine young man studying political science in. After two years of trying, his record ended up on the “homeschooled” desk and he was finally accepted.
A Lang: I went to Ocean County College for a year and a half and with good grades transferred to Rutgers in New Brunswick. However, my BA has proven worthless and I will probably have to go for a Masters or Law School or PhD in Political Science.
Anonymous wrote: What’s wrong with rich people paying the same taxrate as everyone else? Why should a millionaire only pay an effective taxrate of 12 or 15% when the rest of us pay more?
What’s wrong is that you are one of the people who were fooled by Obama! Rich people pay a much higher rate on their standard income. All people pay 15% on investmrnt capital gain. And there are many reasons for that.
1. Most investments were already taxed at the corporate level of arround 36%, thus all are paying over 50% in taxes total on investments!
2. Investments are not a salary, they have risk, sometimes you lose, sometimes you gain. Uncle Sam doesn’t give you back money for the 50% who lose money, thus a 50% reduction in taxes.
3. The most important reason. America runs on investments. Investments run risks of losing their investment. Thus investor’s will not invest at 5% gain, as that is not enough to risk a loss of 100%. It’s all about risk vs return. If you raise taxes on the return, then there is less reason for the investor to risk his money, for he will only be getting 3% on his risk. With less investment, there is less investment income. With less investment income, there is less taxes collected, even at the higher rate. With less investment, there is less jobs. Therefore, the stable minds of the yore, instituted a lower tax rate for investments.
So please don’t get fooled by all these liberal’s propaganda.
One general note about college. Anyone with a good head can get into OCC and work their way from there to Rutgers or elsewhere.
I think these pinheads in Washington should all be FIRED! They get paid a lot of tax dollars and vote themselves raises when they see fit. They work for us and that’s that. If they wont do what they are supposed to do then we don’t need them. Get rid of them and put people in there that will do what is the will of the people. Politicians should be limited on what they can do without going to the people for a vote. They should be limited to two terms one in office and one in prison!
I think that if we put pushkas in every store for the deficit then all economic problems would be solved!!! Geb a bissel tzedaka far de vite house!
Why would you “assume” Mashiach won’t be coming tomorrow????
It would be worth a rough patch in the short term to get our house in order. There is a lot of cash on the sidelines waiting for America to face fiscal reality. You may see the Dow below 9000 for a while, but then you will see growth. I hope to see us over the cliff AND block any deficit increase. Then the only options are to actually pay for programs enacted or cancel them.
Sir, what exactly have you been smoking?
Do you want to go 7.00 milk
And lines at the gas pump?
massive protests
Homeless in the streets
Stockmarket crash
And all real estate devalued.
US would become a police state remincsent of the old Soviet Union( which is what Obama really wants though he’ll never say it)
Have you lost your mind dear letter writer?
to Chacham says:
thank you for setting the facts right ,democratic rhetoric has demonized those who become succesful ,as I said before investment income is taxed at different rate no matter if you are rich, middle or low income the same for all !!!!!!!!!!!!!
To Joe says:
I AGREE !!!!!!!!!!!
show them all the door ,to those who voted for Obama ARE YOU HAPPY NOW ??
This discussion is even funnier then the Tent City rants.
Avi, Take the Praxis and get your provisional certification as a social studies teacher. There is no more rewarding pursuit than teaching. Although it is generally hard to get a job in history, but maybe you can get into LHS. The kids love having a local as their teacher and you will be a bridge to our community.
Oh, I also forgot to mention the estate tax, which is currently at 35% and may go to 45%? So even, from the left over 50% after taxes, Uncle Sam will get a third of it. And that is even on the original investment, not only income.
So let’s do the math:
On an income of 1,000,000
360,000 Corporate Tax.
96,000 Capital Gain Tax
190,000 Estate Tax
644,000 Total Federal Taxes.
26,000 State Taxes (probably more).
680,000 Total
So we have a total tax rate of 68%
Also, we have to point out, that most middle income are people are paying less than 15% of their income. All the lies that you hear about 30%, are including social security and medicaid payments, which are not a tax, just a goverment run retirement insurance. Therefore, there is a maximum that you have to put in there, just like rich people don’t pay more for their comparable life insurance.
So middle class is paying total income tax of under 20%, while the rich are paying 68%. So who is not paying their fare share?
my comments are never posted for one reason or another but here goes again.
The only fair way for all Americans is for the country to have a flat tax, get rid of social programs for a period of time to bring the deficit down and restructure social security for the future.
Are you for real Chacham? DId you ever study the IRC?
Capital gains tax is not income. I wish I could characterize my income as capital gains. You pay 15% on it (I know it went up to 20%, but I am still working on wiping out my capital losses from 2008). And after you pay the estate tax, your basis goes up to its full value so you do not pay it when you sell. Come on–counting the capital gains tax and estate tax in the same column!
The estate tax is not on income but on estates and it is at its historic low since Theodore Roosevelt. A $5 million exemption. I wish we had that when my father passed. We paid around $900,000 in 2005.
Corporation tax is not on individual income. I wish I had a business! I would not pay hardly any taxes, at least this year by taking advantage of Section 179. I also would expense out my “income” by legitimately employing those in lower brackets, like a child who has to pay for college–which I cannot deduct because of the AMT (and about the AMT–I would use the business to lower my AGI so that I would not have to pay the AMT–how can you complain about the corporate tax–there is no better shelter than a business! All your expenses come off the top, above the line! What are you complaining about? What kid of tax advice are you getting?
I consider myself middle income, as I only make about $54,000 a year. Last year, I scrambled to find a business idea to start one so I can have a shelter, but could not do it. Everyone said, better to pay the IRS than waste it on something not viable. I was just a working man. Middle class.
So I ended up paying close to $100,000 in taxes because I had about $200,000 in inherited IRA income (yes, it is taxed again after the estate tax). I paid $74,000 in federal income taxes last year and $15,000 in state income taxes (and like everyone else in Lakewood, $13,000 in local taxes). Not because I do not have legitimate deductions, I have a family like everyone else, but because of the Alternative Minimum tax.
Don’t tell me about the rich paying their fair share when the AMT sneaks up on middle class people putting them into the 28% bracket wiping out deductions for property tax, exemptions for children, credit for child, education deductions and everything else that Congress intended for the middle class.
Most of the rich have business that they can shelter their money into. THis lowers their Adjusted Gross Income throwing them back into lower brackets and avoiding the AMT.
New Sheriff, I feel for you that you were cleaned by Uncle Sam, but so do the rich. Everyone is overtaxed, as Uncle Sam is greedy.
As for your points;
Yes, when we talk about people paying a low Capital Gains Tax, it means that they already paid the 15% tax, and their estate WILL pay Estate Tax on whatever is left over. You are talking in case were they never took the gains, so there was no income.
As for the 5 million untaxed estate tax, the issue here is the ones making millions a year, and they will have 10′s of millions in their estate that will be taxed.
As for your your paying taxes on the IRA, I assume that you were paying all the differed taxes that your parents didn’t pay, as many IRAs you only pay the taxes when you take out.
As for your point that corporate tax is only on income (which means that the rich are paying on dividends 36+35+35 percent in corporate, personal, and estate taxes), it also is reflected in capital gains. For in a stable market, the capital gain goes hand in hand with income, and by companies paying 36% on income, their gain in value will be around 36% less. Or look at it this way, those 36% would have stayed in the compaies bank account, thus pushing up their value. So the capital gains are being taxed indirectly.
All in all, everyone is being taxed unfairly, (and don’t forget, everything you buy has a price that reflects multiple owners and workers paying taxes too), and the important thing for this country is to stop spending!