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Poll: What Should Be Done About the 'Fiscal Cliff'?

Tax rate increases and federal budget cuts are set to go into place on Jan. 1 and could cause another recession.

 

It appears that automatic federal tax increases and budget cuts will occur Jan. 1, CNN reported.

The so-called fiscal cliff is a crisis created out of politics. Without congressional action, the Bush tax cuts will disappear and tax rates will rise across the board. According to the National Federation of Independent Business, the 10 percent tax bracket will disappear. Also, the 25, 28, 33 and 35 percent rates would become 28, 31, 36 and 39.6 respectively.

A single person with two exemptions earning $50,000 per year will see income taxes increase from $7,103 to $8,551 per year, according to a fiscal cliff calculator published by Bankrate.com. If you want to know the affect on your income, use the Bankrate.com calculator to plug in the numbers specific to you.

The Washington Post also has a calculator, letting people see the impact of Demcoratic and Republican proposals.

The Huffington Post reports that the increases would impact nearly every American and generate $536 billion in revenue, and there also would be significant budget cuts, including 9 percent of the Pentagon's budget.

The Congressional Budget Office predicts that without congressional action the fiscal cliff will trigger a recession in 2013. A copy of the CBO report is attached to this post.

The CBO report states that if the fiscal cliff measures go into place GDP will rise by 0.5. If it does not go into place, GDP would rise by about 4.4. However, the report also noted that in the long-term, the U.S. does need to get its trillion dollar budget deficit under control.

"...[E]liminating or reducing the fiscal restraint scheduled to occur next year without imposing comparable restraint in future years would reduce output and income in the longer run relative to what would occur if the scheduled fiscal restraint remained in place."

The nation is facing the fiscal cliff as a result of a deal reached by Republicans and Democrats during the debt ceiling fight in 2011. At the time, it was thought that the fiscal cliff contained things that both parties disliked so much, that a long-term deficit reduction deal would be worked out.

That has not happened.

President Obama's initial plan included freezing tax rates for the vast majority of the country. Tax rates on income earned above $250,000 would rise, CNN reported. Obama also has proposed some spending cuts in an effort to reduce the budget deficit without hurting the economy.

Obama's latest offer increased the income above which the tax rate increase would hit to $400,000, the Huffington Post reported. It also included more cuts in spending and an adjustment to the Social Security inflationary index.

Republican House Speaker John Boehner came up with a plan in which tax rates on income above $1 million would rise, however, Boehner failed to get his own party to support the plan in the House. Aside from shooting down any tax rate hike, Republicans have wanted more changes to programs such as Medicare, such as increasing the eligibility age from 65 to 67 – something Obama has said is a nonstarter.

The Republicans also would end the payroll tax cut that was implemented in 2009 and reduce the size of the earned income tax credit.

The Washington Post has a detailed analysis of both plans.

Patch Local Editor Steve Sadin contributed to this post.

  • What Should Be Done About the "Fiscal Cliff"?

    (Voting has been closed for this question)
    • Obama's plan: We should freeze tax rates for the vast majority of Americans and go back to Clinton-era rates on income earned above $400,000. We also should implement some spending cuts to begin reducing the deficit.
        34 (44%)
    • Republican Plan. No increases in tax rates, but we should drop things like the 2009 payroll tax cut and other tax credits. And we should consider raising the Medicare eligibility age to 67 while making big budget cuts.
        15 (19%)
    • Just do it! The fiscal cliff, while causing short-term pain will put the country on solid financial footing in the long run. I'm cool with it.
        20 (26%)
    • Other. I would do something else entirely!
        7 (9%)
    Total votes: 76
  • Your vote will only count once. This is not a scientific poll. View Results Vote!
Related Topics: fiscal cliff

Mike

9:11 am on Sunday, December 30, 2012

While I don't want my taxes going up... It's time American's pay the bill for everything the government provides. In general, we have been taking advantage of government programs but not paying for them, the cost is pushed to future years. It's easy to use government services when you don't have to pay the full cost. Align taxes with the actual spending. Taxes will go up and then American's will have a clear understanding of the true cost.

In future elections... Americans will vote for the party that increases or decreases spending and taxes depending on the value that they experience.

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Abigail

3:46 pm on Sunday, December 30, 2012

What do you mean "in future elections?" That's already been done. The people who elected Obama are the takers who get the most value for the zero amount they've paid in. It's taxpayers like me who are ineligible and don't get squat.

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Dan Arenov

3:46 pm on Sunday, December 30, 2012

"..fat chance, Mike. the horse is out of the barn. We are over $16,000,000,000 in debt and are borrowing 4 billion every day.

If we learned anything from the most recent presidential election, it's that the majority of Americans don't care about the budget. They don't care about taxes.

They care about getting free stuff from the gov't and don't want anybody to shut down the tap.

There are now more takers than makers in this country. And everybody gets a vote.

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Dan Arenov

3:46 pm on Sunday, December 30, 2012

...adding to this dilemma is the fact that over 5,000,000 Americans have gone on taxpayer funded disability during Obama's first term.

Think about that. 5 million people who were previously considered workers, and who contributed some tax money to the kitty are now dependent on the rest of us to take care of them and their families.

We are upside down and gaining speed.

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Willie Wilmette

3:46 pm on Sunday, December 30, 2012

Mike, it is about time the nation decided what the role of federal government is.
Taxpayers for years have demanded lower taxes, more services, & a balanced budget, it is time we all stop dreaming and stop making some tough choices.
If Washington's budget was smaller, Illinois would not have to subsidize other states as much. What could have been done with the $27 Billion Washington took from us in the last 2 years and did not give back?

McCloud

3:46 pm on Sunday, December 30, 2012

There is no paying the bills, it has never been done before. Nonsense from people who think raising taxes = more government revenue = paying down the debt are completely duped. Spending never goes down, reduction in government programs never happens. Sadly, we have a President who succeeded in blaming others for the mess he made and intends to make in the furure.

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Patrick

7:22 pm on Sunday, December 30, 2012

the mess he made? / See George 43 and Irag War for 6 trillion worth of mess please

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Steve

9:35 am on Monday, December 31, 2012

Yes Patrick, failure to do anything but spend and increase the deficit is a mess. You have to be smoking something to think this hack is a worthy president!

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Mike

9:35 am on Monday, December 31, 2012

McCloud...

I agree that we never pay our bills, that's my point. If everyone was taxed at the rate to pay our bills, there would be fewer people supporting the current government programs.

CaB

3:46 pm on Sunday, December 30, 2012

No one likes to pay taxes. But I like living in a civilized country. I like to have good schools, streets, water, fire and police protection, library services, garbage pickup, clean air, medical services for all. I feel that the Republican party, although perhaps well-intentioned, has become the selfish party. I am blessed with a fantastic life and I'm willing to give back to help ensure it stays that way.

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Dan Arenov

7:22 pm on Sunday, December 30, 2012

" I feel that the Republican party, although perhaps well-intentioned, has become the selfish party."

We have different perspectives on 'selfish'. Personally, i believe the Democrats are the 'selfish' party. They are the ones who refuse to be guided by an annual budget, which used to mean committees submitting recommendations for appropriations...then you negotiate and compromise because you have to come to a budget number.

The Democrats don't mind passing on this huge, insurmountable debt. to our grandchildren's generation so they can continue to live the good life now. That is selfish.

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Gardener

11:56 pm on Sunday, December 30, 2012

CaB It is time to start giving back, then. $16,000,000,000,000 to pay off. Better get started!

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Gardener

11:56 pm on Sunday, December 30, 2012

Please do not post the comment previously submitted. It was not made by me! Thanks

h m

3:46 pm on Sunday, December 30, 2012

Stop the printing of money (40B per month - QE3 - 480B per year). Get out of Afghanistan (170B+ per Year). Withdraw our troops from other countries the the USA is in.. Just by doing those two or three things you can save more than you would by raising taxes.

Extend the extended federal jobless benefits but put various stipulation on the benefits - You must volunteer in your community on a daily basis. Clean the parks, Help at the Schools.

Yes, these people are looking for new work but it does not take 8 hours a day 5 days a week or 20-22 days per month. If they want to receive these benefits let them work for 4 hours per day and look for work the other 4 hours per day.

Instead of raising taxes on everybody making over 250,000 or $400,000 per year, why not just raise the tax rate on the house, senate and the president. They are the ones that have actually let us create the deficit.

Leave Social Security alone. It is something that we have paid into our entire working life. It is not an entitlement.

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Steve

9:35 am on Monday, December 31, 2012

I can't even get past your first paragraph. Seriously?! Withdraw the troops from all the countries the US is in? Okay, on paper yes we would save money. In reality we would loose a foothold in the international community, become a minority power, and loose money. You don't know what you're talking about so please shut up and stop trying to influence people with your nonsense.

Local

3:46 pm on Sunday, December 30, 2012

That's NONSENSE!! We already GIVE them hundreds of billions of OUR hard earned tax dollars and they manage to squander much of it on useless pet projects and PORK!! Washington/Springfield needs to learn to live within they're means, just like everyone else, but it's SO EASY to spend money that's not yours!!!

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h m

3:46 pm on Sunday, December 30, 2012

Couple of other things. The federal government needs to do a RIF (Reduction In workForce). Why should the federal government be so large? Why not finally have the federal books be audited? A private company does that yearly, why not audit them and find out where the money is really being spent

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Robert Jastrab

3:46 pm on Sunday, December 30, 2012

The Congress and Senate, both have nothing but millionairs running the country, and the vast majority pay no taxes, and use their politcal venues to get richer and educate their children. The tax hike would cut into their pockets and while they want everybody else to pay for our country and for their mistakes, they themselves want to eliminate themselves from the from the very fiasco they created!

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Stuart Tindall

3:46 pm on Sunday, December 30, 2012

Didn't Patch already run an article on this? Who cares at this point since the outcome has been decided.

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Brian Hickey

3:46 pm on Sunday, December 30, 2012

Cool...there's that 47% figure again. Who'da thunk it!! Enjoy the ride!

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John L

3:46 pm on Sunday, December 30, 2012

We can't just keep spending money with no thought of what happens when the debt comes due. I wonder how many homes were lost by federal employees, compared to homes lost by the private sector. The government has become a big Ponzi scheme, paying for its programs with our childrens future, and keeping itself in office by buying everyone ice cream.

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Bob Fletcher

3:46 pm on Sunday, December 30, 2012

Don't you just love this poll? Appears almost half are voting for tax increases for others as long as they don't have to pay more.
Wonder how many people understand what spending and not paying for it does to us?
How we all will pay one way or another.
The middle class is the only place there is enough money to make a dent into Obama's spending.

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The Q

3:46 pm on Sunday, December 30, 2012

Hey patch......thats not obamas plan.

His plan is raise taxes on 250k and no spending cuts. Cut the bs.

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The Q

3:46 pm on Sunday, December 30, 2012

And thats not the the republican plan either.....nice journalism.

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Jamiedog

7:22 pm on Sunday, December 30, 2012

I agree 110% with Abigail and Dan!
When will this "sense of entitlement" stop?
Taxes are breaking the backs of small to mid-sized companies where the majority of new jobs are created.

Time to pay the piper in our country--let's start with having ALL eligible people be required to do some kind of work (unless they are truly handicapped, elderly, etc.).
Serious cuts are needed NOW in U.S. spending or we will never be able to get ourselves out of debt with our huge deficit.

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Abigail

7:22 pm on Sunday, December 30, 2012

Isn't the Patch owned by the Huffington Post? Kind of explains the BS, doesn't it.

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Bjb

7:22 pm on Sunday, December 30, 2012

It is going to cost me but let it roll over the cliff. We need to cut costs and raise taxes. Then we need to pass an amendment where congress cannot pass any legislation which exempts government workers including congressmen and senators.

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DeAnn Glover

7:22 pm on Sunday, December 30, 2012

Did you all hear that Obama gave Biden & Congress a raise? Does anyone care that they are being rewarded for their incompetence? Does anyone care that we have a lot of people in this country barely making ends meet? Certainly Obama & the rest of our government in Washington does not. If any of them accept this raise, they should be voted out the next time they are up for election. This is almost as bad as Nero playinv music while Rome was burning.

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Kim

7:22 pm on Sunday, December 30, 2012

Cut your salary s and pensions should only be give for 2-4 yrs while in office You are all elected officials by our great nation under god. Or have you forgotten that greed kills and there's soo many homeless people out there how are you going to support our nation if we go into a recession?
Kim
Evanston ill

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DeAnn Glover

7:22 pm on Sunday, December 30, 2012

To complete my thought. If something isn't done about the outrageous spending in Washington, we might as well be Rome. I am disgusted with all our elected officials in D.C. They just don't care about the American people. SHAME ON THEM!! BTW when I post ftom my phone, my posts always have "Reject" on them.

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Dan Arenov

7:22 pm on Sunday, December 30, 2012

I'm convinced that things will never change as long as we are led by politicians who don't actually have to sign checks and keep our acct. in balance. Hell, i might be different, too, if all i had to do was print more money and not worry about who was going to pay for it.

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The Q

11:56 pm on Sunday, December 30, 2012

Obama plan= way more taxes and even more spending.

Repub plan= less taxes and much less spending.

Please fix the choices

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Gardener

12:09 pm on Monday, December 31, 2012

The Q - you are 100% correct. The media is campaigning for Obama still so you won't get any honesty from them. And unfortunately the American people choose not to educate themselves on the facts. They are sheep being led off the cliff by Obama and the media....

Glen Gorsline

11:56 pm on Sunday, December 30, 2012

Another recession, we are still in one for the last four years !!!!!

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E. Dabalos

11:56 pm on Sunday, December 30, 2012

Damage done by Hurricane Sandy demonstrates the need for investment in our infrastructure. This would also provide jobs which in turn provides revenue in the taxes paid by the newly employed workers. This is only one example of why we must invest in our country if we expect it to grow our economy. Spending cuts must be carefully selected. Remember Social Security and Medicare are not "entitlements". We have been paying into these programs of insurance all of our lives. Many of my family have died before collecting any "benefits" from their investments. Select cuts wisely. The proposed pentagon cuts are less than 10% of it's total budget which has doubled over recent years - this is not an unreasonable amount as spending on wars have diminished greatly.

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Susan Diaz

9:35 am on Monday, December 31, 2012

If congress is consistant they will do nothing and default solves the problem through sequestration. What a sorry crew. http://www.schoolanduniversity.com/
After the recession eats up everyone's pension and the estate values of the wealthy drop three times what they could have paid in taxes congress might be urged to wake up. Until then hold on to your hats and prepare for a dive.

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McCloud

9:35 am on Monday, December 31, 2012

The tax rate hikes will not raise more revenue, look at California where their revenues are down after tax rate hikes. The mattress becomes a favored money place instead of spending or investing, since Obamacare fees, income tax hikes, and bad economy make for 1% GDP. Good luck with more unemployed.

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Jon Hall

12:09 pm on Monday, December 31, 2012

The brilliance of sequestration has eluded our partisan news media. Why tinker with it?

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Brian Hickey

8:29 pm on Monday, December 31, 2012

Hey Glen.....

You haven't had your Kool Aid yet. Drink up !!! You mean annual GDP "growth" of about 2.5% isn't real growth when your government borrows and spends 8% of total GDP to achieve 2.5% "growth" ? Perhaps the missing 5.5% is lining the pockets of government employees and teachers etc... We're still in "recession"?

Next thing you're going to be telling me is that we will soon be seeing some hellish inflation and an economy that's dead in it's tracks.

You might want to Google "Depression" ....it will get you to Wickipedia which will detail how governments don't like to use the "D- word"...and that events like the TARP program which,in effect, nationalized all the banks, are seminal events which by their nature define a depression (vs. recession). Seems the "D-word" has a certain stigma attached to it.

But hey, who needs an education. Just look at the competency rating of District 219 grads. 60% or less. I hope Mr. Robert Silverman (school board head for 20 years now) and Ms. Nanciann Gatta (Niles West Principal, $299,000 annual compensation) are proud of their joint "accomplishments"

In the meantime, watch as the home foreclosures drag on...enjoy Illinois now 100 Billion unfunded pension programs and choke as Cook County continues to rob those of us who have not yet lost our homes (through property taxes, for those who have never owned real estate). First one out WINS !!!

For those who didn't vote BO ...enjoy the ride!

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Brian Hickey

8:29 pm on Monday, December 31, 2012

Hey Glen,

Let's just just pray the Public Sector gets clipped like the private sector and that those pensions fade into the twilight....hell you had mighty fine salaries while you were at it... our "public servants" and educators.

Why do companies keep complaining that graduates don't possess the skills they are looking for anyway?

For those who didn't vote BO ...enjoy the ride! This car doesn't have any brakes!
But hey, ain't Obama a "cool president". He needs a street name...

I suggest CC BO...for "cool and clueless".

Actually, I think 47% might have been a tad low.

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