Illustration from Republican Security Council
The 2012 end-of-year holidays were dominated with talk of the fiscal cliff facing America. As members of Congress worked late into the night, took a brief break for Christmas, then returned to D.C. to continue talks, Americans talked. When it was all said and done, some were happy and some were not.
The Republican Security Council very succinctly described the vote's outcome:
THE GOOD NEWS AND THE BAD NEWS ABOUT THE FISCAL CLIFF: The big fiscal cliff winner was George W. Bush. For a decade liberals ridiculed his economic policies and blamed his 2001 and 2003 tax cuts for the 2008 global recession.Bottom line: we have a spending problem. We cannot keep piling up debt forever and expect the rich to keep bailing us out. Do we really want to become like tax-the-rich Europe? Do we want to advance class warfare? Wake up, America.
Now liberals have made permanent 99.3% of the Bush tax cuts and they describe them as being essential for the survival of the middle class. With their rhetoric today the liberals have completely reversed course. We are glad they now believe the Bush tax cuts were excellent economic policy.
THE BAD NEWS is that the Biden/McConnell compromise has solved little and has made the situation worse. This is clearly no solution to our economic problems, and the Congressional Budget Office says it will add $4 trillion to the deficit over 10 years.
Everyone is describing the new top federal tax rate as 39.6%. However, with the addition of Obamacare, the Medicare tax hike and the new phase out of charity and mortgage deductions, it will be 45%.
If you're self-employed and live in a high tax state, your new combined federal/state top rate is about 60%. Those who are self-employed must pay both sides of the Social Security and Medicare taxes, so their top rate is 50%.