Even at 35%, they will be close to the 39.6. What I haven't heard anyone on the news mention is that the first 5 of about 20 "taxes" to fund the "Affordable" Care Act go into effect in 2013. One is a 3.9% "fee" on income and investment income for those that make over $200K/$250K (single/married).

Whoops, didn't check yesterday but we hit 74! Good thing I took the over!

Perhaps you can explain the assessments by both private and government officials (OBM) believe that "over the cliff" will mean loss of about 2M jobs? Many statistics are subject to debate and are widely disputed, but this isn't one of them.

Maybe James has inside information that makes these projections wrong. What is James' projection of employment changes?

Roger, just stop with these absurd comments. If we went over the cliff for one day do you think that we would lose 2 million jobs because of it?

If we went over for a week do you think we would lose 2 million jobs? How about a month?

The point I'm making is that any projections you may have read about are based on the assumption that we go over the cliff and stay over the cliff indefinitely. Rest assured that will not happen.

The thing to remember about the fiscal cliff is that it's not a cliff at all; it's more of a gently sloping hill that becomes progressively steeper.

Since you want to compare government debt to household debt - I'll play along.

If I am deep in debt, not making enough money, spending too much money, I will do two things. Cut the amount of spending I do on wasteful or unneeded things. Then I will look at how I can increase my income - look for a better job. To do this I may need to acquire new skills, meaning I will need to take classes or go back to school. This will cost money, or investment or even stimulus, if you will. I will probably also need an interview suit. I have a suit that I wore when I was interviewing 20 years ago, but the world has changed since then and I need to upgrade. Also an investment or stimulus. Throw in networking functions, books and computer software and I would consider all of this a valid investment in my future.

Saying that the government's stimulus program should be stopped because it doesn't work is an opinion, not a fact. The country was on the brink of a depression in 2008, which didn't happen. Auto company loans, stimulus to build and repair infrastructure and help keep people employed almost certainly was a part of this. Also, over a third of the stimulus was tax cuts. Ready to stop that part of the bill also?

Energy independence is a pipe dream, unless you support the nationalization of our energy companies. Companies will drill in the US, then sell to the highest bidder on the ever more competiitve global market. Have your gas bills gone down since they've started drilling for gas in PA? We are at record levels of exporting oil in this country, drilling has increased under Obama. This is all great for oil companies to make record profits, but energy independence in a world where many other countries are catching up to us in consumption, is not going to happen. Energy companies are always going to maximize their profits, if this means drilling here and shipping to Japan, China or India, that's what they'll do.

" ... Auto company loans, stimulus to build and repair infrastructure and help keep people employed almost certainly was a part of this ...."

What do we know about the auto company loans? The loans set up Chrysler for a sale to a foreign company. The GM loans have helped spur growth in foreign markets. GM just announced doubling their manufacturing in China, giving employment to citizens of China. The outstanding stock worth about $26B remains outstanding, with little chance of ever getting the doubling of stock price for full recover. GM never offered something to the American marketplace that was unique. To suggest "saved the auto industry" is bogus. GM had a small segment of the market, a piece that could have quickly been absorbed by others. Many who lost big money in the handout to the UAW have vowed never to buy a GM product. GM is loosing potential customers to this stance -- yes, it is lots of people.

Even by the Dems concede that the stimulus money was not effective for infrastructure improvements. Most money went to pet projects, paybacks that were waiting for government handouts. The "shovel ready" idea was only in name, with nothing in reality. It never happened. Consider the miniscule change in unemployment rate - enough said.

Roger, you really need to the facts on the auto bailouts. First, the US auto makers have hired thousands back and keep performing better. Have you even seen the European car industry. It still hasn't recovered. Those automakers were just infused with cash and are failing. GM and Chrysler were forced into a managed bankruptcy and reorganized. Do you know why Chrysler is owned by FIAT? When Chrysler was run by a new York American firm, Chrysler NEVER had a profit and was run into the ground. In the second full year of FIAT ownership Chrysler posted its FIRST profit since the 90s. Darn thoses Italians making our companies profitable.

Jacob, yes, you are right about more workers. However, your comments do not justify a non-bankruptcy plan that other companies in trouble follow. A bankruptcy, and reorg, could have accomplished a similar outcome, without taxpayers being on the hook for $26B yet. A bankruptcy would have meant those who had invested in GM for years and years would have undoubtedly received something in the outcome. The Fed plan left them with an empty pocket.

Companies go through bankruptcy proceedings on a regular basis, and emerge on the other side. Some flounder, others flourish with a new plan. The US bailout in this case was unnecessary, other than for political reasons.

Do you expect the stock will rise to $52 so that the taxpayers will get the loan back? Today, the closing was at $25, a price not unlike the past year. I think the stock was offered at $32, and it dropped to mid-20s, and has never made it back to the IPO.

If GM would have vanished, what would be missing? What unique product did GM bring to the market that no other manufacturer offered? Many years ago, the big three were critical to national defense, with manufacture of important military vehicles. But, that era has passed. There was no reason for GM to continue. Yes, workers would have lost jobs, but other manufacturers were ready and able to fill any void, with those workers.

I am not convinced, nor will I buy any GM product.

Roger first, GM could not have gone through a normal bankruptcy and come back. No private institution was willing to pour the billions needed to get GM working again. The government was the only one who was willing save the company. Furthermore, GM might not have a critical product but it is central to hundreds of thousands of jobs. If GM liquidated, that would hit suppliers (ppg is one) which would come back and hit the other automakers. GM must have been saved to save hundreds of thousands of jobs and the gov't was the only ones willing to put money into GM.

@Jacob
GM most certainly COULD have gone through normal bankruptcy proceedings. In fact, GM looks one Hell of a lot like it would have if it had gone that route. Just a few examples: Thousands of dealerships closed, two Brands eliminated due to redundancy (Pontiac and Oldsmobile...soon to be followed by Saturn), several plants closed due to over capacity. Don't fool yourself...GM got exactly the result they would have gotten with normal Bankruptcy proceedings.

The difference??? Well, the UAW got paid off, the Bond Holders got Screwed royally, Delphi (GM's Parts Division) got royally screwed, and the US Taxpayers got to buy controlling interest in a peice of crap auto company that is headed right for bankruptcy once again.

So, why should ANYONE be happy about this again???????

I agree with you Ernie. The GM deal was structured to benefit the Unions and the investors (which include retirees whose funds are tied up in GM stock) got next to nothing. We as tax payers are now unfortunately investors also. The Union basically got a big chuck of GM and made zero concessions. I never understood why they didn't go through a normal bankruptcy; however, with family working in the auto industry I supported the bailout until I saw how it was structured. I find the actual deal indefensible.

It's not a program, per se. The fiscal cliff was created as an incentive for the two parties to work together to find an agreeable solution to our fiscal problems.

And if we go over the cliff we will actually be much closer to balancing the budget. The reason that politicians want to avoid the cliff is because it would cut the deficit much too quickly -- so quickly and by so much that it may cause the economy to contract again.

We do know that Geithner's proposal taken to Capitol Hill last week was not genuine. To propose $1.6T in new spending, including $400B in new stimulus money was dishonest. All the rhetoric about wanting to work together to get a deal done went down the drain with this meeting. I don't believe I heard one Dem commending Geithner for the proposal. They knew they didn't want to be associated with such an idea.

I'm unsure why Obama and Geithner took this path. If their intent was to put out an olive branch, this didn't fit the bill.

I am also unsure why Pres Obama remains in campaign mode. He knows the election is over, so these campaign appearances look pretty silly. Rather than speaking at various businesses around the country with rhetoric that is sopped up by those attending, why isn't he in Washington working with those who need to make decisions? This is one time when the populist approach really looks strange. We live in a republic, with elected officials elected on behalf of the citizens to make decisions. All those hearing these campaign speeches are not the ones in a position to work toward an agreement.

For Pittsburgh, yeah it's a lot of money. $250K is not a lot if you are living in NYC, San Francisco, Chicago, or several other American cities where the average house is about $1M and you need a two income family just to make the mortgage. It also catches a lot of the small businesses that file under individual returns. $1million is probably a more reasonable number. In fact 2 years ago when the Bush tax cuts came up there was a group of democrats pushing to raise it to $1M. I haven't heard that again this time around.

Sue T
11:12 am on Monday, December 3, 2012

For Pittsburgh, yeah it's a lot of money. $250K is not a lot if you are living in NYC, San Francisco, Chicago, or several other American cities where the average house is about $1M ....>>>>

That's exaggerated, except for Manhattan NYC. So rich people buy homes in Manhattan.
From April to May of this year, the median price of buying a home in San Francisco increased 3.9 percent to $705,000.
As of November 26 2012 there were about 33,971 single family and condo homes listed for sale in Chicago Illinois. The median asking price of these homes was approximately $169,900.
Furthermore, salary.com figures that someone making 100K in PGH who moves to NYC where cost of living in New York, NY is 87.3% higher than in Pittsburgh, PA, you would have to earn a salary of $187,310 to maintain your current standard of living. Employers in New York, NY typically pay 20.6% more than employers in Pittsburgh, PA . Therefore, if you take the same type of job in the same type of company in New York, NY you are likely to earn $120,573 .
So you'd have to make adjustments, most likely not LIVING in NYC, but in one of the outer boroughs as many do.
The reality of some of these numbers is far less painful than what some people imagine them to be.
Hey, just go for the ones making 1Million, if you think the folks pulling in $251K are too poor to withstand an increase on that last thousand they make.

So it's only $705K not $1M (and you use a average for Chicago, which is watered down by the prevalence of lower econmic neighborhoods) You miss the point. You have two people, husband/wife both working to meet the mortgage. So, now you want them to sell their home and move to Brooklyn so that you can raise the taxes on them? What about the landscape guy that has 4 people working for him, and takes in more than $250K....he files his small business on an indivual return, but as to pay his employees out of that. Now you raise his tax rate. So, I guess he fires one worker to cover the increase in taxes. It's not as black and white as your numbers looked up on the internet appear. These are people, not statistics. And, the fact that they may be paid more to work in NYC is meaningless. We are talking about the impact of taxes on the take home wage. If anything it hurts them. It's pushing them into a higher bracket.

@Sue, the landscape guy doesn't pay his employees out of his $250,000. Those wages come out before his income is taxed. And if a couple has both spouses working to pay the mortgage, perhaps they should consider living a less expensive lifestyle. I know $250,000 may not be a huge income in expensive cities, but it certainly isn't peanuts. Many, many people manage to live on way less than that everywhere. I couldn't live the same lifestyle in LA or NYC that I do here, that's why you make choices about how to spend your money. The "higher bracket" is only for income above the new level, not all the income earned.

@Deb/NE12...We'll have to agree to disagree. It's not worth debating with strangers to me. If you are going to raise the rate for higher earners, IMHO the $1M figure proposed by several democrats in 2011 is a more reasonable cutoff then $250K. But in either case it's just a bandaid Obama and Congress are using to smoke the public. It's a drop in the bucket as far as our countries financial problems - only enough $$ to fund our country for 8 days (so does it really matter if you use $250K or $1M??). We need to take an ax to spending and gut the current tax system and go for real reform. Something neither party is willing to do.

$200,000 and $250,00 income levels were the levels used by Bill clinton when he raised taxes on the "rich." Since the 1990's when Clinton and the Dems did this (leading to the Democratic massacre and the Republican Congress), there has been inflation and the devaluation of the dollar, especially under Bernake/Geithner/Obama. That old $200,000 is more like $400,000 today.

@NW!@Ukid, so what percentage of their income do you think is fair for those that make more then $250K?

Just back to the preBush cuts rates for the dollars over $250K, keep the cuts for $250K and under.

Taking them back to the pre-Bush tax rates, actually makes them higher. You have to add on another 3.9% tax that starts in 2014 as part of the health care bill (anyone over $200/$250K). Plus, an additional 3.9% "contribution" to medicaid. So that is 39% plus about 8% or 47%. Is that enough for you? Remember, that doesn't incllude state and local taxes. Personally, I rather see everyone's go up a "fair" amount rather then hitting one group. Especially the cut on Social Secuirty taxes. That should disappear for everyone. Of course, I believe in a flat tax, no deductions. But who listens to me. And why has there been dead silence on all the corporations that pay ZERO corporate federal income tax? No one seems to be mentioning it. Not the politicans, not the press, no one on this blog and others? Again, we need a flat corporate tax.

NE12Ukid
8:32 pm on Monday, December 3, 2012

So that is 39% plus about 8% or 47%. Is that enough for you?

Only on the portion ABOVE 250K, of course.
Don't make it sound like they'd be paying that % of their whole income!
With all the deductions they are not paying that % either. Remember what Warren Buffett said about the percentages paid.
I do remember back in the day when MY INCOME was in the 34% bracket, of course I was not making anything like $250K for sure! More like 40K back then...I did what I could to put some $$ in tax shelter like a PA tax free bond, kept close track of my deductions for state and local taxes, real estate taxes, and other allowed deductions. And surely survived.
But with the current economy, just slowly recovering, the lower income people shouldn't have to pay a higher rate, as it's the ones with the big incomes who have the most deductions and credits now. AND can afford to pay a little more.

get better english teachers so that i could put a paragraph on paper that is proper and not all run ons

So that is 39% plus about 8% or 47%. Is that enough for you?

Only on the portion ABOVE 250K, of course.
With all the deductions they are not paying that % either. Remember what Warren Buffett said about the percentages paid.
I do remember back in the day when MY INCOME was in the 34% bracket, of course I was not making anything like $250K for sure! More like 40K.

Please excuse...tried to delete the repeat post here in the wrong place, but patch is just "patching" this evening.

Warren Buffet was refering to people like himself whose income is based entirely on investments. Mr. Buffet does not take a salary. He takes his pay entirely in stock options so that he infact is lowering his own tax responsiblities. He would pay more if he actually collected a salary instead of taxes. He is playing the game.

And yes, you have made $40 K and paid 34%. But, the fact is, you want to raise taxes on the upper brackets but not yourself and call that fair. I don't. I'm not near the $250K mark, but I know what is far and what is not. And, expecting others to pay more while you do not is not fair. Neither is expecting any of us to pay for all the expenditures the government is commiting to. The fair thing is to get rid of all deductions, go with a flat tax, and actually develop and federal budget that cuts the $$ Washington is bleeding.

Remember that they would not be paying 39.6 fed rate on money under 250K, if that goes through.

The problem with socialism is that you eventually run out of other people's money. ”

― Margaret Thatcher

It's Obama's proposal to raise the the tax on dividends (from 15% to 25% I think, didn't look it up) to the pre-bush tax cut rate as well as the income tax rate for the ovr $250K?

@ Sue T
LOL! To be perfectly honest, I have no idea what O's latest and greatest proposal is, other than he purposely ignores the Spending side of the ledger as usual, and focuses on the Revenue side as if that will cure all ills.

Good point Ernie. At first I thought he was just tryng to raise the tax rate to 39%, but based on some things I heard in the last few days, he is really talking about takeing all the tax breaks off of those making >250K, including investment income. but, since he never gives any details, we really can 't say. He is still just doing the campaign souind bits. No real concrete information. But whatever addition "revenue" he plans to take in, is just a drop in the bucket compared to the excess spending....ok, and he's pretty much spent it on more "stimulous packages" anyway. Everyone in Washington should be fired.

I rather see a flat tax then a fair tax. I've looked quit a bit into the fair tax, and I don't believe it is "fair" for retirees. It would be if they were operating under the fair tax system from day one (when they started working) but they are not. So, the way I see it, they are being double taxed. Once when they earned it (and on the interest once they saved it) then again when they spend it in retirement.

Just who are the 47 percent?
It's actually 46% but...
The Tax Policy Center, a project of the Brookings Institution and the Urban Institute, released a detailed analysis of the group in July 2011.
The Tax Policy Center researchers found that about half of the group is basically exempt from federal income taxes because they are low income and also may have a large family.
TPC explained that "a couple with two children earning less than $26,400 will pay no federal income tax this year because their $11,600 standard deduction and four exemptions of $3,700 each reduce their taxable income to zero."

The other half are zeroing out their federal income tax bill with other provisions, such as itemized deductions or the child tax credit. Some are seniors who are living off Social Security.

To be clear, the people in this group ARE STILL PAYING TAXES. They are subject to payroll taxes for things like Medicare and Social Security, federal excise taxes on things like gasoline and state and local taxes including sales taxes on items they purchase.

The other half of the 46% are not in the lower income brackets. A separate report released last spring by the IRS found more than 35,000 people who made more than $200,000 and also managed to zero out their tax bills. That report noted that it generally takes a number of different credits and deductions for wealthy people to not pay any federal income taxes.

And your numbers NE12, just show why we need to get rid of all deductions, credits, etc and move to a flat tax.

No one likes that one?

Not surprised, that quote is from Mitt Romney.

Well, I went to your link, and I entered in a $250,000 income with 2 kids...

Guess what? The tax burden in 2011 was $61,000. After the "cliff" or the "obama Proposal" columns both give a tax burden of $71,525. So much for your goofy $199 figure. Let me put my surprised face on now....

OOPS, mispoke there...the fiscal cliff column gives a burden of $71,000, the obama proposal column about $1,000 higher than the 2011 column.

Although when I look at the calculations of the obama proposal taxes, things look a bit squirrely. I guess I will continue to believe he has no proposal and the fiscal cliff number is the only accurate on there...

Ernie,
I put in $250 for a married person with two children.
Here's the results, hope this link works:
http://goo.gl/qq7wI

If you look at that example, the difference is $1512 more under Obama's plan for the married person with two kids. Of course that does not include any specific deductions/credits, just the standard deduction, which explains the difference.
Did you put in your own income to see how you'd fare?

http://goo.gl/qq7wI

Here's an example with a 100K income, same married with two kids, assuming 6K in real estate taxes, and 1000 in charitible contributions.

As to Mr. Ungar's $199 figure, which you call "goofy" it DOES SAY "average American household" so that would include certain deductions/credits, which are not included in your figuring.

" ... This is about stealing political power. ...."

This ^^^^.

Its even worse than that...

Obama has trapped himself in a corner, and hedoesn't have the mental horsepower to figure a way out. He promised his great voter base that he was going to "get them rich folk" and now he can't back down. Even though the words out of his own mouth in previous years have been that raising taxes during a recession is a bad idea, and that a national debt of 64% of the GDP was unAmerican.

Funny how his words had meaning then, but have no meaning now. Well, when I consider his performance as POTUS and Leader to date, I suppose it is not funny at all.

Hey Obama, here's a clue...listen to what your vaunted Debt Commission told you in the first place!!!!

Right, Ernie. The discussion is no longer about the economics of the matter, rather the political positioning.

All those quotes of two years ago, "We cannot raise taxes ...." were spoken, but I guess had no meaning then. If the power struggle is won by the WH, then everything else is up for grabs in the next couple of years. EO will be the path.

Roger,

As time goes by, I am starting to believe we might actually NEED to go over this "fiscal cliff". I really don't see the average American getting educated in how the Economy actually works any time soon. Perhaps it is time to face the inevitable music and pay the piper for the insane promises we have made over the decades???

Ernie--it scares me, but I've been thinking the same thing the last couple of weeks. It may be time to take the dive.

Obviously Washington isn't serious about this matter. If they were, they would be sitting around the table, shirt sleeves rolled up and hitting it hard. Instead, it's out politicing. I swear it's like the campaign never ended. Ralley's and the golf course. I'm sorry, but our leadership is not providing an example of work ethic.

Mary I agree with your, We need Washington to cut Senate and House Salaries by 20% and cut their expense accounts in half, have to pay into SS and have obummercare health coverage. obummer and family wants vacations, playing golf every day or basketball then pay for the whole thing yourself, buy your own food, pay all the utilities in the section of the Whitehouse that you live in. michelle staff that she has should be coming out of the obummers pay or michelle should get a job and pay for them out of what she makes. Cut welfare to 3 months out of the year to anyone that doesn't work including obummercare (welfare care) to a maximum of 12 months a lifetime except for the truly disabled and Senior Citizens. Every year anyone on SSI or SSDI has to reapply and see doctors and are subjected to being followed to make sure they aren't faking it (creating jobs). To many fakers out there collecting SSI or SSDI. Anyone that hires illegals or people under the table pays a 50% penalty or go sit 2 years in jail at your own expense. If your caught in the US illegally then you are deported back to where you came from. All loans to big business, banks and auto dealers should be paid back at 10% interest. Flat rate of income tax of 25% for everyone

Looks like cc KNOWS NOW that Congress is a part of the SS system,
you're very welcome, cc. Glad to help.

Members elected since 1984 are covered by the Federal Employees' Retirement System (FERS). Those elected prior to 1984 were covered by the Civil Service Retirement System (CSRS). In 1984 all members were given the option of remaining with CSRS or switching to FERS.
As it is for all other federal employees, congressional retirement is funded through taxes and the participants' contributions. Members of Congress under FERS contribute 1.3 percent of their salary into the FERS retirement plan and pay 6.2 percent of their salary in Social Security taxes.
Members of Congress are not eligible for a pension until they reach the age of 50, but only if they've completed 20 years of service. Members are eligible at any age after completing 25 years of service or after they reach the age of 62. Please also note that Members of Congress have to serve at least 5 years to even receive a pension. (continue)

The amount of a congressperson's pension depends on the years of service and the average of the highest 3 years of his or her salary. By law, the starting amount of a Member's retirement annuity may not exceed 80% of his or her final salary.
According to the Congressional Research Service, 413 retired Members of Congress were receiving federal pensions based fully or in part on their congressional service as of Oct. 1, 2006. Of this number, 290 had retired under CSRS and were receiving an average annual pension of $60,972. A total of 123 Members had retired with service under both CSRS and FERS or with service under FERS only. Their average annual pension was $35,952 in 2006.

My mom lost all of her stock in the bailout. She's still bitter about it, but she would've lost it anyway if they had liquidated without the bailout. She probably should've sold it in the 90s. Still, I'm thankful that the bailout agreement left some legacy money/health care for my grandmother, who is practically dependent on it today.