NY’s Eve ‘Me Too’ “deal” on “fiscal cliff” means not very happy 2013 for taxpayers, economy

selloutIn 1972, 1980, 1984, and 1988 the GOP ran a national ticket touting the promise of limited government and tax cuts.  The Republicans saw smashing, overwhelming victories in each of those years.

In 1976, 1992, 1996, 2008, and 2012 the GOP ran tickets that couldn’t convincingly tout the free market — instead offering an argument of “We might spend a little more, and raise some taxes, but not as much as THOSE OTHER GUYS.”  A failure to significantly differentiate themselves from the Democrats left voters with little choice but to stick with the team that promises all kinds of goodies paid for by somebody else.

After the New Year’s Eve deal blessed by congressional GOP leadership, how can ANY future GOP candidate credibly attack his Democrat opponent as a “tax-and-spender”?   Here are some of the horrid details of said “deal”:

[…] The bill raises income tax rates for those taxpayers with incomes more than $400,000 for individuals and $450,000 for couples from 35 percent to 39.6 percent. These higher income taxpayers will also pay higher rates on investment income, with rates on dividends and capital gains rising from 15 percent to 20 percent. Add the 3.8 percent ObamaCare surcharge on investment income — another tax that takes effect in January, and the top rate on investment income would rise to 23.8 percent for those high-income households.

The bill also raises taxes on couples earning more than $250,000 a year and single people earning more than $200,000 by limiting personal exemptions and itemized deductions.

Estates taxes will also be increased, with the top rate raised to 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates.

The bill also delays the automatic $1.2 trillion draconian sequester spending cuts for sixty days. The sequester cuts, evenly split between defense and certain domestic discretionary spending, were scheduled to go into effect on Jan. 1, 2013. The $24 billion cost of the sequester delay is allegedly made up with a mix of spending cuts and new revenues from rules changes on converting traditional individual retirement accounts into Roth IRAs.

Worse, the bill actually increases the deficit by including:

  • A permanent fix for the alternative minimum tax.
  • A five-year extension of tax credits for college tuition and the working poor, which were enacted as part of Obama’s failed 2009 stimulus.
  • A one-year extension for unemployment benefits, affecting two million people.
  • The long-term unemployed could count on receiving emergency benefits for another year, at a cost of about $30 billion. […]

Senators Burr, Hagan and Graham ALL voted for this debacle.  (Senator DeMint did not vote.  He’s apparently out shopping for drapes for his new offices at The Heritage Foundation.  But looking at the vote total, it doesn’t look like he would have made much difference.)

If the above info wasn’t enough to make you sick, Daniel Horowitz at RedState has MORE:

[…]What about the spending side? Here are the spending increases:

  • A $30 billion one-year extension of Medicare doc fix
  • A $30 billion one-year extension of 73 week unemployment insurance. Over the past four years, the federal government has collected roughly $192 billion in federal unemployment payroll taxes, while paying out $510 billion in benefits. Evidently, that’s not good enough.
  • Stimulus Refundable Tax Credits: Somehow, a 5-year extension of Obama’s stimulus refundable tax credits got inserted into the deal. So he calls a tax cut a handout, and a handout a tax cut. These latter three provisions alone will easily top $100 billion a year, dwarfing the $50-$60 billion in static revenue projections from the tax cuts on the rich. So much for a balanced approach.
  • Green Energy Pork: The irony is that while the rich earned every penny of their money, Obama refers to the current system – one in which the top 1% pay 37% of the taxes – as a handout to the rich. Yet, this deal extends a true handout, the 2.2 cent per kilowatt/hour wind Production Tax Credit. This is a refundable credit that can be claimed by any wind company that fails to generate a profit, of which there are many. In addition, all special interest credits passed out of the Senate Finance Committee – the real loopholes in the tax code – are included in the deal.

Of course, nothing is being done about the 5 major Obamacare tax hikes that are set to take effect this week, including the deleterious 2.3% tax on all medical devices, the millionaires’ surtax, and the 0.9% increase of the Medicare payroll tax. It’s absolutely stupefying that Republicans couldn’t use this as a leverage point, after 16 Democrat senators, including Al Franken, wrote a letter requesting a delay in the implementation of this tax.

Of course, there is no agreement that Senate Democrats must formulate a budget for the first time in 1342 days.

[…] Not only will Republicans fail to push real spending cuts in exchange for the debt ceiling, they might actually toss an interception and incur more tax increases. Lindsey Graham already began repeating the insanity from 2011 by demanding spending cuts from Obama in one sentence while emphatically declaring he would never “let us default” in the next sentence. That sort of rhetoric will really scare Obama into compromising on spending.

Moreover, the preliminary framework of this deal calls for delaying the sequester for two months. That will coincide perfectly with the debt ceiling fight, providing Obama with another bargaining chip and gratuitously exacerbating the schism between fiscal conservatives and defense hawks.

[…] The amazing thing is that this deal is more appalling than the previous plans floated over the past few months. If Republicans planned on caving, why didn’t they just agree to this in November? At least the stock market would have been spared from uncertainty.