Thursday, January 3, 2013
And everyone knows by now this was no agreement-- just another cowardly can kicking on spending cuts (this time two months) which will coincide with the vote to raise the debt ceiling which can not be kicked...
But here are some facts you may not know:
1) Under Obama's earlier proposals, the average tax filer making $1 million or more would have had an average tax increase of about $180,000. Under the cliff deal, their tax increase averages about $120,000 - saving them $60,000 from what they might have paid under the Obama proposal.
There are currently 8.9 million Americans who are at least millionaires in a population of around 310 million.
So in simple math: 8.9 million x $60,000 = $534 billion in deprived revenue which the government can not use to pay the national debt because of Obama's compromise with the Republicans so the Asian markets wouldn't be shaken yesterday.
2) Dividend earners were the big winner from the cliff deal. While Obama and many Democrats advocated for a rise in the rate for dividends to 39.6 percent, the rate inched only up to 20 percent.
So to keep things as simple as possible, let us say those 8.9 million millionaires make a stock market dividend profit of $50,000 each on average, how does the math work out?
8.9mil millionaires x $50k x .396 (advocated tax rate) = $176.22 billion
8.9mil millionares x $50k x .20 (new tax rate) = $89 billion
The differential: $176.22 billion - $89 billion = $87.22 billion...
That's $87.22 bn in deprived revenue... and when you add this figure to the $534 bn. mentioned previous, the US Government has allowed the wealthiest of the wealthy to collectively keep $621.22 Billion dollars that could have gone to pay the National Debt...
3) Obama had proposed an estate tax of 45 percent on estates of $3.5 million or more (and some Democrats wanted an even higher rate), The cliff deal sets the rate at 40 percent on estates of $5 million or more.
We're not going to take the time to do the math on this one... let's just say the wealthy win again
4) The "fiscal cliff" legislation passed this week included $76 billion in special-interest tax credits. This wasn't snuck in during the 11th hour negotiations while we all were sleeping... Nope.. This was instituted this past August
"The Family and Business Tax Cut Certainty Act of 2012, which passed through the Senate Finance Committee in August, was copied and pasted into the fiscal cliff legislation, yielding a victory for biotech companies, wind-turbine-makers, biodiesel producers, film studios -- and their lobbyists." (Washington Examiner)
OK, so here's what happened: In late July, Finance Chairman Max Baucus announced the committee would soon convene to craft a bill extending many expiring tax credits. This attracted lobbyists like a raw steak attracts wolves.
Former Sens. John Breaux, D-La., and Trent Lott, R-Miss., both now lobbyists, pleaded for extensions on behalf of a powerful lineup of clients.
General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision -- known as the "active financing exception" -- is the main tool GE uses to avoid nearly all U.S. corporate income tax.
Liquor giant Diageo also retained Breaux and Lott to win extensions on two provisions benefiting rum-making in Puerto Rico.
Continuing from the article: "The K Street firm Capitol Tax Partners, led by Treasury Department alumni from the Clinton administration, represented an even more impressive list of tax clients, who paid CTP more than $1.68 million in the third quarter.
Besides financial clients like Citi, Goldman Sachs and Morgan Stanley, CTP represented green energy companies like GE and the American Wind Energy Association. These companies won extension and expansion of the production tax credit for wind energy.
Hollywood hired CTP, too: The Motion Picture Association of America won an extension on tax credits for film production."
5) Here's the big kick to the balls, folks...
All those corporate tax breaks.. was pushed hard to be in the fiscal cliff bill by the White House! Yep... that supposedly "socialist/communist" President that the fiscal conservatives love to hate.
As we said before, they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week.
"The White House wanted permanent extensions of a whole slew of corporate tax credits. When Senate Republicans said no, "the White House insisted that the exact language" of the Baucus bill be included in the fiscal cliff deal...
So there you have it.. A President only two months removed from an impressive re-election win and who never had to run for public office again thus never to pander to Wall St, ended up actively being the bitch of Fortune 500 corporations and the very affluent while pretending to fight for the little guy..
We genuinely fear for Social Security and Medicare by the time debt ceiling negotiations go into high gear in late February, especially because the tea party Republicans are hungry to slash n' cut them to ribbons..
Can things get any sadder??
Posted by Susquehanna at Thursday, January 03, 2013