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Thread: Is the US about to go over the (fiscal) cliff?

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    Politics.ie Member gijoe's Avatar
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    Default Is the US about to go over the (fiscal) cliff?

    If no deal can be struck between Republicans and Democrats prior to the new year in a lame duck Congress the US will be implementing approx $1/2 trillion in spending cuts and tax increases for 2013 - split roughly 50:50. It is estimated that even with good private sector growth this will put the US back into recession and of course the rest of the developed world will follow suit. The markets are dreading this possibility but I wonder if letting the fiscal cliff take place would not work out as being good for the overall economy?

    Sure their will be some short-term fallout but if the US finally addresses it debt situation it can repair its long-term economic outlook. And other added benefits is that it should see a big decline in commodity costs, especially oil, and will keep interest rates low for longer. Outside of the obvious implications this has for our own fiscal maths the overall impact for people may not be so bad if commodity prices in particular take a sharp fall leading to a period of deflation.

    Maybe going over the cliff may not be such a bad idea after all?

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    there will be another fudge or the republicans congress will actually compromise with obama. Obama should get bill clinton to talk to the republican congressional leadership for 2 weeks, there is no better man for striking a grand bargain, boehner probably acknowledges there will be some tax increases but whether he can sell it to the gop is another matter.
    "War is never economically beneficial except for those in position to profit from war expenditures."-Ron Paul

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    But, but, Super Obama is in charge, all world ailments are solved now... or something like that....



    Foodstamps Surge By Most In One Year To New All Time Record, In Delayed Release | ZeroHedge

    Everything is under control....
    “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” - Friedrich A. Hayek

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    Americans must be the most selfish people on earth, not to mention dumbest. A relatively minor tax increase at the upper levels would work wonders for their economy.

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    Politics.ie Member ManOfReason's Avatar
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    Quote Originally Posted by Man or Mouse View Post
    Americans must be the most selfish people on earth, not to mention dumbest. A relatively minor tax increase at the upper levels would work wonders for their economy.
    That must explain why Europe is thriving....all those minor tax increases.
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    Quote Originally Posted by ManOfReason View Post
    That must explain why Europe is thriving....all those minor tax increases.
    With the exception of Ireland and Britain, you do really get a bang for your buck in Europe. I'd hate to live in a society that loathes its weakest and poorest.

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    Quote Originally Posted by Man or Mouse View Post
    With the exception of Ireland and Britain, you do really get a bang for your buck in Europe. I'd hate to live in a society that loathes its weakest and poorest.
    Yes, with the exception of Ireland and Britain...During the administration of Republican President Dwight D. Eisenhower, a 92 percent marginal income tax rate for top earners in the United States remained from the previous administration of Harry S. Truman. At the time, the highest tax bracket was for income over $400,000.This was nearly the highest tax rate for top earners in the century, just under the 94 percent rate for income over $200,000 instated during World War II under Franklin D. Roosevelt's presidency.
    In 1954, the 92 percent marginal rate decreased to 91 percent under Eisenhower. The maximum tax on long-term capital gains was 25 percent -- a rate that remained in place for a decade.

    The good old days.
    Free speech doesn't exist. Anyone who doubts this and shoots off the mouth must be prepared to deal with the consequences, especially in Ireland. petunia

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    Politics.ie Member firefly123's Avatar
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    Quote Originally Posted by Troy_337 View Post
    Yes, with the exception of Ireland and Britain...During the administration of Republican President Dwight D. Eisenhower, a 92 percent marginal income tax rate for top earners in the United States remained from the previous administration of Harry S. Truman. At the time, the highest tax bracket was for income over $400,000.This was nearly the highest tax rate for top earners in the century, just under the 94 percent rate for income over $200,000 instated during World War II under Franklin D. Roosevelt's presidency.
    In 1954, the 92 percent marginal rate decreased to 91 percent under Eisenhower. The maximum tax on long-term capital gains was 25 percent -- a rate that remained in place for a decade.

    The good old days.
    But as you well know America in the fifties was a backwards hellhole where no scientific development happened as people fled high taxes to be entrepreneurs elsewhere. Or something.
    Life is hard
    That's why no-one survives

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    Dylan2010
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    Dont let facts get in the way of a bit of ol' daydreaming


    So, let's get more complicated. When there was a 94% top rate in 1944-45, there were so many deductions and exclusions that the taxable income was not comparable to someone's entire income. First, the top rate started at $200,000, which today is equal to $2,413,059.90 — so the maximum EMTR would apply only to incomes of $2.5 million. But, that's still taxable income, not earned income.

    In 1944, you could deduct business meals, all business travel, all forms of interest payments, and much more. You could even deduct spousal travel expenses on a business trip! (Why travel alone?) Companies could also "loan" or "provide" almost anything to an employee, from an apartment to standard benefits. It was possible to shelter tens of thousands of dollars from taxable income. Three-martini lunches and expense accounts were important realities, skewing tax calculations.

    As a result of deductions and exclusions, even the theoretical maximum Real Rate of taxation at 60% in 1944 overstates taxation dramatically. The reality? On earned income, the richest U.S. taxpayers paid close to 40 percent of their earned incomes in taxes in 1944. We simply didn't count much of the compensation as taxable income.

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    Politics.ie Member Analyzer's Avatar
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    Quote Originally Posted by Man or Mouse View Post
    Americans must be the most selfish people on earth, not to mention dumbest. A relatively minor tax increase at the upper levels would work wonders for their economy.
    Ever meet Irish popstars going Dutch ?
    Coveney's ambition is the be Ireland's next EU Commissar and Ireland will pay a price as he builds his CV to position himself sufficiently loyal to the nEU empire.

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