Thu
Jan 3 2013
08:32 am

The "fiscal cliff" tax deal has some interesting provisions beyond extending lower tax rates for people making less than $400K.

There are a few hidden features such as subsidies for NASCAR tracks and goodies for Wall Street. It's not all corporate welfare, though. There are also tax breaks to promote public transportation and electric bicycles.

The Washington Post has some highlights...

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bizgrrl's picture

One thing I'm happy about is

One thing I'm happy about is the return of the Social Security paryoll tax rate to 6.2%. Lowering that tax for any amount of time was not a good idea.

In 1970 the SSI payroll tax rate was 4.2%. It was raised to 5.35% in 1981 and to 6.2% in 1990. If anything, we should continue to slowly increase this tax rate. It has been over 2 decades since there has been an increase.

The Medicare payroll tax was 1% in 1973. Forty years later the rate is 1.45%.

We're willing to pay much more for so many other things but not these two important programs.

gonzone's picture

I totally agree. Thank you

I totally agree. Thank you for saying this.

trobinson's picture

Here's something that was

Here's something that was way, way below the radar. Reid was able to get a bunch of senate confirmations that had been held up for months as part of the deal.

Harry Reid's actions yesterday were couched in the driest of dry-as-dust Senate protocol, referring to nominees only by number. They were very nearly revolutionary when measured against events of the last few years, in which Republicans filibustered even the most routine appointments for many months, and showed implacable hostility to several. Even the thought of Elizabeth Warren running the Consumer Financial Protection Bureau was too much for them. Apparently Reid and McConnell agreed to let all of the confirmations go through that would pass with large majorities if they could be brought to the floor. McConnell's part of the deal appears to have been to let the other Republicans think that the Senate was adjourning while all of this went on.

Ried and Obama are sometimes more effective than is than we think...

trobinson's picture

But then, there's the dark

But then, there's the dark side:

The house GOP wouldn't reauthorize the Violence Against Women Act after years of support:

"The House leadership would not bring it up, just like they wouldn't bring up funding for Sandy [hurricane damage] last night,

even though there's bi-partisan support:

"I absolutely would support the Senate bill," Rep. Tom Cole (R-Okla.) told HuffPost in late December, speculating that other House Republicans, namely GOP congresswomen, "are very supportive of that."

because of:

... a key protection for Native American women that was included in the Senate bill.

but they could find a few million to deny equal marriage rights:

during a closed-door meeting of the House Republican Conference, lawmakers gave a green light to including language in the 113th Congress rules package that authorizes the House legal team, known as the Bipartisan Legal Advisory Group (BLAG), to keep paying outside counsel to defend the Defense of Marriage Act in court.

and they didn't forget to stick it to small farmers:

"Many smaller, targeted programs to fund farm and food system reform and rural jobs...were left out completely. Also left out of the final deal is any workable dairy policy for the next year and any disaster aid for livestock and fruit producers. The deal also has the effect of keeping farmers from being able to improve soil and water conservation through enrollment in the Conservation Stewardship Program at the present time," Hoefner says in an NSAC statement released Wednesday. "We are extremely disappointed in the Republican leadership for proposing this deal and in the White House for accepting it. The message is unmistakable -- direct commodity subsidies, despite high market prices, are sacrosanct, while the rest of agriculture and the rest of rural America can simply drop dead."

courtesy of Mr McConnell:

McConnell's efforts seem to abandon any attempt to reform farm programs or save on federal spending through the elimination of direct payments, which both the Senate and House agriculture committees have supported. And he rejects new dairy programs that were also unpopular with House Speaker John Boehner (R-OH) and some milk processors.

How nice.

Anonymous3's picture

failing government

a perfect tax bill. It would not take more than several pages. Do away with all deductions and give every one a 15% tax bill yearly. One flat rate for everyone. You want to fix the budget, get the silver spoons out of Washington DC and put practical,hard working people who know what it means to work for a honest day's pay. Do away with the lobbies and the fluff bills, and get politics out of the way. For once in the political realm do what is best for the country. Nero fiddled while Rome burned. Face the fact that the trickle down theory does not work. The money trickles down as far as the suit's pocket and that is where it stays. Cut something that was not worked for and paid in by the working people. Social Security would be alright if the government had not pumped so much money into the welfare system. Pay a woman to have one child a quantity of money for the one child and no more. In some cases, one woman will rack up 12 to 15 hundred dollars for many children conceived by different men. Often these children are given to relatives and in a great many cases abused. I am willing for my taxes to pay for one mistake but a 2nd,3rd,4th is not mistakes and the woman needs to have the responsibility for those. THEY HAVE MEDICAL CARDS THAT WILL PAY FOR PERMANENT BIRTH CONTROL. (GET FIXED) If you can't afford five or six children why have them. It is not my place to pay for your little indiscretions.

Fabricant's picture

Well,this was predictable.

Well,this was predictable.

Tess's picture

SS tax rate

The Social Security tax rate should never have been adjusted downward. But, it was, and restoring the tax rate causes an effective 2% pay cut for all working Americans. That hurts!

Fabricant's picture

Yes it does but not having SS

Yes it does but not having SS hurts too.

Tess's picture

we will see

Yes, that would hurt, but we will see, won't we about the future of SS? There is still a lot of talk that the next congress will attempt to convert SS from a trust to a free market fund.

On another note, I am glad to know that the state and local sales tax deduction was extended for another year.

(link...)

Fabricant's picture

Yeah, the future of SS is not

Yeah, the future of SS is not looking bright and Obama is doing nothing to prevent the SS payroll tax increase from subsidizing private financial investment.

As for the itemized sales tax deduction, I don't buy enough stuff for it to have much of an effect on me.

Tess's picture

It is based on income

You can take sales tax on big ticket items or an amount based on your income. I think you have to itemize deductions in order to take this, but if you do, it certainly helps.

I use the free downloadable version of TaxAct to do my taxes each year and it walks you through all potential tax breaks.

metulj's picture

So it is only a tax break for

So it is only a tax break for big spenders. Nice.

Rachel's picture

The SS tax needed to come

The SS tax needed to come back. I'm not totally thrilled about the spouse's take home going down by 2%, but it needed to happen.

And no, SS won't be converted to a "free market" system as long as Obama is in the White House. It might get fiddled with, but not to that extent.

Fabricant's picture

If you as a Republican come

If you as a Republican come forward and say, I want to gut Social Security, unless you're in an incredibly safe seat—and, you know, they lost a seat that they had held for 120 years when one of their candidates did this—you really face destruction at the polls. So somebody has to—from the Democratic Side, has to legitimize opening the door to taking whacks at Social Security.
And that is precisely what Obama is proposing to do. And they are appealing to his vanity, that you can be the great centrist, the great bipartisan person that achieved this grand bargain and saved the nation and such, which is, of course complete nonsense

-William K Black

Obama is laying the foundation for the privatization of Social Security. Believe Dat.

Tamara Shepherd's picture

*

That deduction for state and local sales taxes was a joke from Day One, given how few filers can itemize deductions.

According to The Tax Foundation, fewer that 36% of Americans can itemize deductions--and fewer than 26% of Tennesseans can. Other reports I've read in recent years pegged the percent of filers who can itemize at even lower rates.

The deduction was little more than a ploy on the part of a handful of Congressional folk in non-income tax states, conceived to keep state income taxes out of their districts.

And it worked.

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