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Cliff Deal - Winners and Losers

Bruce Krasting's picture




 

Note: I wrote the following after watching the Prez on TV. His smiling demeanor and tough guy talk led me to believe that a "patch" on the cliff might happen. Four hours later, and that is not the case. The House will not vote on anything today.

There is a chance that the House could vote tomorrow. This would bring results along the lines I describe below. But if the House does not vote, then it means there will be a long fight. A fight that could go on until the debt limit shuts the government. 

These people are desperately trying to fail.

 

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My read of the President's speech is that there is a deal that will avoid the cliff. So go enjoy New Year’s Eve. Give it another 30 days, and we’ll be right back into the soup. My scorecard on the deal.

 

-If you’re unemployed, you’re a winner. You get another extension of benefits.

 

-If you’re employed, you’re a loser. Fully 155m workers are going to pay 2% more on income starting tomorrow. The increase in FICA taxes will come to a lumpy $120B. This will rank as one of the largest YoY tax increases in history. This is a very regressive tax increase. There is a $108K cap on what is subject to FICA taxes, so high incomes do not feel the bite. But those who earn an average income will see a meaningful reduction in disposable income ($2,000 per household).

 

This is a decidedly un-Democratic outcome. The rich avoid taxes, lower incomes pays a disproportionate share. Who insisted that this unfair outcome was part of the deal? Answer: Harry Reid, Nancy Pelosi and Barack Obama. Don’t blame the Republicans when your next check has an extra bite out of it. “Go figure?”, on this outcome.

 

-If you make between $250 and $400k, you are a very big winner, congratulations. Half of the top 2% just got a free pass.

 

-If you make over $450k, the cliff deal says you may have to pay more taxes. I wouldn’t worry too much about the top 1% - that group has 18% of all income. The move from 35 to 39.6% for America’s richest will not matter a bit. None of them paid the old rate, they won’t pay the new higher rate either.

 

-If you’re one of the 33 million taxpayers who avoided falling prey to the Alternative Minimum Tax (AMT) by the last minute patch, you dodged a bullet. This would have taken an average of $4k out of your pocket. I’m happy for you.

 

-If you’re one of the 4 million hopeless losers who have been stuck with AMT in prior years, you’re going to get stuck again. I’m one of those poor souls who is mired in this tax trap. It's a very unfair outcome for me. I make a fraction of the top 1%, but because of AMT, I pay a minimum federal tax of 28% while the top 1% pays an average of only 15%. Where’s the damn cyanide?

 

-The defense industry will have the bubbly out tonight, no sequestration for them for the time being. Phew! I was really sweating this one!

 

-Investors will also have the Champagne out. They dodged a bullet – at least for the next 60 days…..Keeping the 15% Cap Gains rate for most incomes is a plus, the new 20% rate for the top filers is a gift.

 

-The American people are very big losers. The cliff deal just sets up another crises before the snow melts. Nothing has been accomplished that addresses the uncertainty factor. The deal insures a big deficit for 2013. It will not increase tax revenue from the top 1%. It will result in a big increase in payroll taxes that will hurt the bottom 40%.

 

-Washington is the biggest loser of all. Democrats, Republicans, Senate, House and Obama all come off looking like chumps. They didn’t deliver anything but a Band Aid. I give the cliff deal a D-.

 

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Mon, 12/31/2012 - 15:46 | 3110116 Panafrican Funk...
Panafrican Funktron Robot's picture

"What I don't understand is why aren't young people rioting in the streets over the massive deficits and the debt being dumped on them?"

We're waiting for the system to collapse on itself.  Our protest is in conserving our energy until we receive a real benefit for the work we do.  The old want to leech off our efforts, fuck them.  I'm perfectly content hanging out, eating my beans and rice, while you dipshits try to defeat math.    

Mon, 12/31/2012 - 16:09 | 3110200 Freddie
Freddie's picture

Stop trying to steal grandpa's beans and stop trying to turn granny into fertilizer.  You kids are all the same!  Get off my lawn!  Spoiled little F'k's!

We are Baby Boomers and we are the hippest and coolest generation there ever was and ever will be!  Don't you forget it! 

 

(sarc)

PS: I "ain't" a ***king Baby Boomer either. They suck!

Mon, 12/31/2012 - 22:17 | 3111297 prains
prains's picture

Friedndie

 

is a classic divide and conquer troll, always looking to call somebody else a fucktard when he has it tatooed to his forehead but doesn't own a mirror

Mon, 12/31/2012 - 18:08 | 3110744 Imminent Crucible
Imminent Crucible's picture

Freddie. Is that any way to talk to us younger folks? If you keep trashing us boomers like that, I won't come around on Sunday to take you out of the old folks home for your weekly visit to the Clinton Library.

Mon, 12/31/2012 - 16:03 | 3110172 over45
over45's picture

We're waiting for the system to collapse on itself.  Our protest is in conserving our energy until we receive a real benefit for the work we do.  The old want to leech off our efforts, fuck them.  I'm perfectly content hanging out, eating my beans and rice, while you dipshits try to defeat math.   

 

What an idiot.  All time stupidest comment on record and further proof that younger generations think they can make it all go away by doing what they do best - nothing.

You have to live in the world you leave yourselves and not be so selfish.  You should be rioting in the streets NOW and not sucking down beans and rice and playing with your iphone. 

Mon, 12/31/2012 - 19:02 | 3110873 Colonel Klink
Colonel Klink's picture

I'm over 45 too.  Please remove your name, you're giving us a bad rep.  Starving the system is the most effective thing they could do.  Hell leach from it while you can.  Only thing you can do is be just a bit more prepared than the majority of others.

I've tried discussing what govt is currently doing and where we're headed with young and old alike,  most are too stupid to comprehend the concept, involved in their own life, or just don't care.  Sheeple is a well earned moniker.

Mon, 12/31/2012 - 17:39 | 3110630 Mr Pink
Mr Pink's picture

Sometimes the only way to win a game is choosing not to play

Ive been out of the system since May and by the end of 2013 I plan on being a ghost

I laugh when I see people still slaving away because they think it's the right thing to do. This criminal government has sold you out and if you think your employer gives a shit about you you're an old fool.

Smart people have figured this out and have taken their ball and gone home.

Mon, 12/31/2012 - 19:05 | 3110881 Colonel Klink
Colonel Klink's picture

QFT!

My brother from another mother.

Mon, 12/31/2012 - 18:03 | 3110724 Imminent Crucible
Imminent Crucible's picture

Congrats, Mr Pink. It's not that hard, is it? I've found I have to give up a few conveniences, but in return I get so much more. I have the freedom to travel when I choose, to organize my life around the people that matter to me, instead of some business or corporation's needs.

I like the slow mornings, strong coffee, time spent with family and working at my own pace.  There's a whole industry in the U.S. that exists to sow unhappiness and discontent; we call it Madison Ave sometimes, or just "marketing". Its purpose is to make you feel dissatisfied with what you have until you blow a bunch of money on the new Apple HiDef JetSki Flat-Screen 400-horsepower Cappucino Maker. Yeah, that'll make the girls throw themselves at you!

Mon, 12/31/2012 - 21:12 | 3111194 Clever Name
Clever Name's picture

I like the slow mornings, strong coffee, time spent with family and working at my own pace.  There's a whole industry in the U.S. that exists to sow unhappiness and discontent; we call it Madison Ave sometimes, or just "marketing". Its purpose is to make you feel dissatisfied with what you have until you blow a bunch of money on the new Apple HiDef JetSki Flat-Screen 400-horsepower Cappucino Maker.

Well effing said. Good on ya.

Tue, 01/01/2013 - 13:16 | 3112245 Cpl Hicks
Cpl Hicks's picture

What I like is goofing off at my own pace.

Like right now, and tomorrow.

Mon, 12/31/2012 - 19:30 | 3110947 akak
akak's picture

ImminentCrucible, you know that they just came out with the new Apple HiDef JetSki Flat-Screen 400-horsepower Cappucino Maker 2.0, don't you?  With a screen 0.3% larger than the old one, it is the latest and greatest --- a must-have!

You are a total behind-the-times loser if you don't go out and buy one TODAY.
I mean, don't you want to be cool?

Mon, 12/31/2012 - 20:15 | 3111081 Imminent Crucible
Imminent Crucible's picture

Get real, akak. Of course I pre-ordered mine so I didn't have to stand in line at midnight with the iLosers. I am cooler than dry ice.

Sometimes you're so insulting.

Mon, 12/31/2012 - 22:55 | 3111393 Tango in the Blight
Tango in the Blight's picture

The hipsters will laugh at you if you don't have the latest of the latest on day one.

Tue, 01/01/2013 - 02:25 | 3111655 willwork4food
willwork4food's picture

Pre-ordered?? I pre-ordered mine months ago. It was rush delivered. All I had to do was get a nifty Car-Title loan, load up the Visa and ask my mother in law fore a few bucks until payday.I'm the current king of the block (party).

Losers.

Tue, 01/01/2013 - 08:18 | 3111774 lewy14
lewy14's picture

I've had mine since before it was in production, having ordered a prototype when it was on KickStarter.

You are all lame.

Tue, 01/01/2013 - 12:25 | 3112119 Imminent Crucible
Imminent Crucible's picture

You are all lame

Hey, that's right. I'm lame. And being lame qualifies me for disability. HEY BARRY! Where's my free stuff?

Mon, 12/31/2012 - 17:38 | 3110628 Imminent Crucible
Imminent Crucible's picture

PanAfricanFunk "should be rioting in the streets".

Yeah, that makes sense. That way the cops can ID him as a public menace, beat the crap out of him and toss him in the county jail. What good did rioting in the streets of Athens do? Greece is still screwed, still sucking on IMF "austerity".

Nope. PAF has it right. Get on with your life, but as far as the Corporate Fascist Machine is concerned, stay on strike. Organize your life and economic activities so that you don't feed the corporate bankster piggies. It isn't that hard; the tax laws point the way clearly. You can be perfectly legal and starve the dragon at the same time.

Rule #1; Avoid "jobs". A job puts someone else in charge of your life. Do useful work that you want to do, do it on your terms as much as possible, and structure your lifestyle and living expenses so as to keep money out of the hands of greedy corporations and corrupt, thieving politicians. It's your civic duty.

Rule #2; Don't expect anything from "the Government". There is no such thing. There's just a bunch of pirates in charge of the SS America, and they're looting the ship while it burns to the waterline.

Mon, 12/31/2012 - 17:45 | 3110656 Mr Pink
Mr Pink's picture

+100 IC.

My goal is to get by without ever earning another taxable dollar. I am doing my part to starve the beast. I call it going " xtreme Galt"

Mon, 12/31/2012 - 16:31 | 3110293 AGuy
AGuy's picture

". All time stupidest comment on record and further proof that younger generations think they can make it all go away by doing what they do best - nothing. You should be rioting in the streets NOW and not sucking down beans and rice and playing with your iphone. "

Huh? Actually his course of action is the logical one. If he riots he is likely to get thrown in jail, or worse label as a domestic terrorist where they hold you indefinately, if not torture you (mentally if not physically). My guess is that your doing nothing either, otherwise you would be here, but stuck in some gov't prison hell hole.

The only real logical solution is to become self-reliance and try to help friends and family. No point in trying to fix the unfixable. Live below the radar. After the collapse, then come back and help rebuild it. My guess is that you have not done this, and hoping that other people save you when the crisis does unfold. That would make you worse then him since he is being self-reliant.

Mon, 12/31/2012 - 17:31 | 3110597 CynicLaureate
CynicLaureate's picture

You don't have to be a CEO to "Go Galt".  These young people are simply skipping over the "start your own company and sacrifice everything to make it work" step...

 

Mon, 12/31/2012 - 15:43 | 3110096 AGuy
AGuy's picture

"What I don't understand is why aren't young people rioting in the streets over the massive deficits and the debt being dumped on them?"

Simple: They don't have a clue. Ask the average Young person on the street how much the Federal Debt is and how much the budget decficit is? Consider that many of them are going into big time debt to get a college degree. Perhaps when they understand that student load debt can't be forgiven and they will be forced to pay $100K+ in student loans while making peanuts at a mediocre job, then they will start rioting.

 

Mon, 12/31/2012 - 20:07 | 3111060 Vendetta
Vendetta's picture

I work with quite a few young people and most of them are well aware how rotten the system is.   Oh, and there are young people protesting, its called OWS but they are hated by most for some reason (including the govt).  Golden Sachs donated $5 mil to policemens' fund in NY  .. wonder why...

Mon, 12/31/2012 - 15:33 | 3110066 ptoemmes
ptoemmes's picture

Long past time to "behave" - that is to be shamed into behaving - like a good citizen, patriot, etc.

I've seen how they act, what they do versus what they say...So have you.

I shall act accordingly from now on with respect to my "relationship" with government, TBTF financial institutions, and others.  Nothing necessarily overt.  Hopefully "effective" passive resistance.

Don't have to burn it down...it will burn down on it's own - just with less of my "wealth" in their hands.

 

Pete

 

Mon, 12/31/2012 - 15:31 | 3110061 Disenchanted
Disenchanted's picture

 

 

If you’re employed, you’re a loser.

 

That's easily fixed...

Tue, 01/01/2013 - 19:03 | 3113070 neidermeyer
neidermeyer's picture

I'm ratting out my employer to the IRS right now on form # 211  ,, I am most definately NOT an independant contractor (previously determined by the IRS)  .. The way I figure it when they're contacted by the IRS they'll probably shut down for good and my cut of the takings will be at least 2-3 years of pay... That and the determination on IRS form SS-8 that I'm an employee will get me 99 weeks of free cashola..

Lets get this party started!

Mon, 12/31/2012 - 15:26 | 3110048 opencircle
opencircle's picture

does the 15%-20% investment income tax include the 3.8% obamacare surcharge?

Mon, 12/31/2012 - 21:44 | 3111250 DosZap
DosZap's picture

does the 15%-20% investment income tax

WHO has made any investment income to tax?.

Certainly not the 55 and up crowd,anyone who was/is in this market is playing with Nitro Glycerin.

Mon, 12/31/2012 - 16:11 | 3110212 Bruce Krasting
Bruce Krasting's picture

No, that's on top

Mon, 12/31/2012 - 16:10 | 3110206 sluggo
sluggo's picture

Nope.  And Investment Income that was previously treated as "unearned" (e.g. rental income) will be subject to the 3.8% Obamacare tax too.

Mon, 12/31/2012 - 15:23 | 3110040 steve from virginia
steve from virginia's picture

 

 

 

As of 2:17 PM there is still no deal (Washington Post). The Department of Defense is looking at 800,000 furloughed workers starting Wednesday. 

 

@Krasting:

 

I’m one of those poor souls who is mired in this tax trap. It's a very unfair outcome for me. I make a fraction of the top 1%, but because of AMT, I pay a minimum federal tax of 28% while the top 1% pays an average of only 15%. Where’s the damn cyanide?

 

Where indeed? You and yours have been electing these white-shoe cocksuckers, decade after decade ... you deserve what you get and worse. Where are the damned guillotines?

 

Instead of beating up retirees and people who actually have to work for a living, how about going after your own ... the so-called 'investors' who demand that free lunch from the finance 'system' (racket)?

 

It is the capitalists who give capitalism a bad name.

Tue, 01/01/2013 - 12:44 | 3112176 GAAPpreNixon
GAAPpreNixon's picture

"Defense is looking at 800,000 furloughed workers starting Wednesday."

That'll be the day...

WAR and those who make it is the religion of our politicians. They would rather die than stop stealing money from the American people to fund the Corporate War Machine.

Mon, 12/31/2012 - 17:54 | 3110688 OneTinSoldier66
OneTinSoldier66's picture

What Edmon said, and this...

 

You can call what we have now something if you want, but please, just don't call it capitalism.

Mon, 12/31/2012 - 16:21 | 3110246 Edmon Plume
Edmon Plume's picture

...if the US practiced capitalism, and the participants were capitalists, and if there was actually any capital.

Tue, 01/01/2013 - 03:29 | 3111688 Dane Bramage
Dane Bramage's picture

Zactly.   Capitalism w/o capital??   What we really have = Fiatism?  Debt Noteism?  FRNism?  Whatever one would call an economy based on a private cabal's unconstitutional, irredeemable, fiat currency monopoly. 

Tue, 01/01/2013 - 12:08 | 3112077 Imminent Crucible
Imminent Crucible's picture

"Dollargarchy".

Mon, 12/31/2012 - 15:23 | 3110039 Dollar Bill Hiccup
Dollar Bill Hiccup's picture

Every time I watch Congress, I can only think of two words .... well, words that I can repeat in polite company at any rate.

TERM LIMITS.

Everyone has their hands in everyone else's pockets, and the MIC has the deepest pockets.

Mon, 12/31/2012 - 23:35 | 3111471 Freddie
Freddie's picture

America stopped having real elections in 2008 and 2012.   Your votes do not count anyway.  It was bad before but hope and change is exponentially worse. 

Tue, 01/01/2013 - 12:38 | 3112159 GAAPpreNixon
GAAPpreNixon's picture

You are off by about 100 years. Around the time the federal reserve bullshit was created, a cork was put on the max rep count in the House. THAT'S WHEN ELECTIONS STOPPED COUNTING and corporate money finished what Rockefeller started and the USA became an OIL OLIGARCHY.

THAT'S WHY THEY THEN LET WOMEN and MINORITIES VOTE. IT DIDN'T MATTER WHO VOTED!

Mon, 12/31/2012 - 20:14 | 3111076 Vendetta
Vendetta's picture

the country has been playing whack-a-mole with these politicians forever it seems.  These politicians offered up by the these 'parties' are like clones from the mutant factory,  How many non-globalists are in office?

Mon, 12/31/2012 - 16:02 | 3110162 Freddie
Freddie's picture

We do not have real elections.  Romney sucked but Mullah and his goons stole all the swing states in early voting and on election night.  Soldiers votes did not even get counted.  The RINOs in the GOP said nothing.

Mon, 12/31/2012 - 21:32 | 3111228 DosZap
DosZap's picture

 Soldiers votes did not even get counted. The RINOs in the GOP said nothing.

 

What else is new?, this has been going on in EVERY election as far back as I can remember,IF a Dem holds the POTUS chair.

Mon, 12/31/2012 - 19:11 | 3110901 boogerbently
boogerbently's picture

Maybe Mitt really DIDN'T want it.

Mon, 12/31/2012 - 23:41 | 3111478 Freddie
Freddie's picture

He wanted it enough to steal Midwest states from Santorum with Rove/BUSH/NWOs help.  The midwest and a few other primaries were just like election night.  At the last minute - the race was stolen in the cities with over votes and fraud.

It happened to Santorum in MI, WI, OH and a few others.  Romney got the same, almost identical, medicine election night from Obama.  Swing states had all night voting, early voting, fraud voting you name it.  FL, MI, OH, VA, WI and a few others.  You just need to steal the swing states.  We live in a police state.

Mon, 12/31/2012 - 22:39 | 3111354 Tango in the Blight
Tango in the Blight's picture

True, they must know the economy is going to collapse, so let Obama be saddled with all the blame. The way they treated Ron Paul at the RNC sez it all.

Mon, 12/31/2012 - 15:47 | 3110119 AGuy
AGuy's picture

"Every time I watch Congress, I can only think of two words ...TERM LIMITS."

Not likely to make a difference. The replacements are just as bad if not much worse! The only way to fix it is to remove the Money train from Washington and make Lobbying illegal, punishable with 20 year manditory prision sentances.

 

Tue, 01/01/2013 - 13:58 | 3112344 tango
tango's picture

A Guy - baning lobbying is a bad thing.  Lobbyists inform politicians - some good, some bad but they pass information.  How many Senators are truly knowledgable in space travel, health care, finance, agriculture, spying, education, energy and welfare?   Explaining a problem (taxes, regulation, dumb rules, EPA harmful provisions, goals, dreams, etc) is not necessarily a bad thing.  We are not the agrarian nation of our Founders as much as many would like that.  The problem is when money and not information drives votes.

Mon, 12/31/2012 - 16:28 | 3110268 James-Morrison
James-Morrison's picture

We already have term limits:  Don't Vote for Incumbents.

We are just too stupid to use them.

Mon, 12/31/2012 - 19:09 | 3110894 boogerbently
boogerbently's picture

That's why we need them !

Most people feel politicians are crooks.....except for my guy.

Of course, term limits would just expedite the # of "full retirement" pensions we need to pay.

Mon, 12/31/2012 - 19:40 | 3110990 Clinteastwood
Clinteastwood's picture

Term limits would result in new Congresscritters who would be more easily controlled by the entrenched Washington bureacrats.......until the new 'critters figured out what's really going on........that would take about a year.....then they could start running out campaigning.

Altogether, with term limits the real power devolves to the bureaucrats.

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