Over the Cliff? A Better Deal Would Be Worth the Wait

[kentuck]

http://www.tnr.com/blog/plank/111494/fiscal-cliff-negotiations-weekend-obama-boehner-mcconnell-reid-tax-cut#

<snip>
Let’s review what happens on January 1, at least officially, if Congress and President Obama don’t act:

Tax rates on all incomes would return to what they were during the Clinton era, before the Bush tax cuts reduced rates. Automatic spending cuts to a wide variety of agencies, including the Pentagon, would take effect—a punishment Congress imposed upon itself, by failing to find alternative spending cuts that it had vowed, in 2011, to find. Extensions of refundable tax credits for the working poor, families with children, and people paying college tuition would expire, as would an emergency federal program that provides extra unemployment benefits and a temporary reduction in payroll taxes. Medicare would reduce what it pays doctors and income tax filers would have to consider whether they fall into the “alternative minimum tax,” resulting in substantially higher liabilities.

Lots of people would feel the impact personally—their paychecks would shrink, government services would become less available, and so on. In addition, the policies as a whole would reduce the money going into the economy, causing it to slow down and quite possibly fall back into recession. That’s obviously not an outcome anybody wants.

But would all of these things happen right away? Is January 1 truly the make-or-break date that so many politicians and pundits seem to think? That’s a lot less clear.

.....more

[JDPriestly]

1. I'm all for going back to the tax rates of the Clinton era.

It will suck some money out of the economy, but the government can then put the money back in by paying off some of its debt.

I think we should impose a transaction tax on the computerized trading on the stock market -- that fast-trading. That would increase the stability and health of the markets and provide revenue for the government to repay debt.

I also think we should close bases overseas.

And I would like to see taxes increased on imports. That money could be used to fund things like healthcare including the pay of doctors from Medicare and the new healthcare networks. It would help shift part of the profits made by overseas investors who import finished products into our market into government programs that can improve the lives of displaced workers including the unemployed and the underemployed.

If Walmart refuses to pay its workers enough to be able to feed themselves and pay for healthcare, we should tax the imports they sell in their stores to generate tax revenues that will pay for government programs that help Walmart employees get the food and healthcare they need.

Seems fair to me.

Why isn't Congress considering these kinds of ideas?