Congress actually does their job and passes the fiscal cliff deal, but that doesn’t mean it’s a win

Late last night the House of Representatives passed the Senate’s final version of the deal to avert the so-called fiscal cliff. Incredibly, we’ve reached the point where getting House Republicans to actually do their damn job almost looks like a victory. After behaving like petulant, tea partying children to keep the legislation from passing just to avoid a small tax hike on the wealthiest folks in the US, they actually cast votes on a compromise – you know, their job as members of Congress.

Of course, House Republicans still managed to be total asses and stop a vote on Hurricane Sandy relief. Seriously.

While the fiscal cliff vote happened, that doesn’t mean it was a win for those of us struggling to live in this country. The deal returns taxes on individuals making over $400,000 and couples making over $450,000 (the top 1%) to the pre-Bush eras. These tax levels were already incredibly low, though. Check out this chart from the Washington Post showing taxes on couples making over $250,000 in the past century (the dotted line at the end shows what would have happened if the deal had raised taxes on folks making over $250,000, which it failed to do):

The Washington Post article also includes a chart showing the extreme decline in the tax rate for the top 1% when taxes on investment income are taken into account, which is increasingly how the rich make their money, and which isn’t subject to personal income tax. The rich are very much still not paying their fair share.

The legislation included action on a few other items, like keeping the price of milk down and an extension to unemployment insurance. The National Journal has a breakdown of everything that was included. Tom Harkin spoke clearly about how the bill fell short, particularly in the area of employment.

What wasn’t voted on, and part of what the Republicans are so pissy about, was cuts to so-called entitlement programs. By which they mean cuts to the remaining shreds of our country’s safety net. This is just a temporary hold off – the issue was pushed back two months, when we’ll be going through this bs all over again. So your grandmother is safe from extreme cuts to her social security for now, but only temporarily. Everyone, including President Obama, is talking about cuts to the nation’s spending on health care. What we haven’t been hearing about is cuts to how much we spend on war.

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2 Comments

  1. Posted January 2, 2013 at 10:02 am | Permalink

    Separate from our thoughts on the absolute level of where the tax cuts kick in, I’d be interested to hear folks’ thoughts about the closeness of the individual/couple numbers. Should high-earning people be taxed more because they are a member of a couple? Isn’t this premised rest partially on the construct that this country is made up of couples with on one earner and one stay-at-home spouse (which we know is totally false for almost everyone)? I find it troubling that tax policy incentivizes that model. Two married people who make equal salaries are taxed much, much more than a dude making double who has a SAH wife.

    High class problems, I know. But personally I think gender equality is a goal for folks at all points in the income scale.

  2. Posted January 2, 2013 at 1:48 pm | Permalink

    I’m a high income individual married to a high income individual, and it would be nice to stop calculating the yearly savings of divorce. I’d be in favor of taking the current “married” rates and making them the rates for singles – for example taking the new 39.5% for 450k couples and applying that to 225k singles.
    We can’t really afford to lower taxes as a nation unless we cut things. Military would be nice to cut, I guess.

    Tax breaks I’d like to see go:
    -Mortgage break (really only applicable if you have a big mortgage and you’re taking lots of other deductions)
    -Child tax credit (if you need help to take care of your kids, you need help. If you don’t, why do you need this?)
    -Payroll tax break for those earning over $110k – I mean, really?
    -Employer contributions to medical insurance
    -Imputed rental income
    -Sales/state tax deduction – this makes no sense

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