Archives For Fiscal Slope

Tax-related issues took center stage in 2012. Between the drawn-out fiscal cliff negotiations, Romney’s 47% comment, the persistence of the Occupy movement, updated rules from the IRS and the presidential election, there was no shortage of tax talk. The talk becomes reality for Americans tomorrow (Jan. 30, 2013), when the IRS officially begins the 2012 tax filing season. In this post, we outline the highlights, predictions, changes, opinions and other worthy information on the 2012 tax filing season.

Continue Reading...

The deal was a last ditch effort to save automatic spending cuts and tax hikes induced by the fiscal cliff from crippling the economy; in that regard it was a success. It comes with a silver-lining though — Congress now has two more months to resolve trillions of dollars in sequestration. Embrace yourselves for the fiscal cliff, part two.

Continue Reading...

The Joy of the Fiscal Cliff

December 29, 2012 — 1 Comment

Until today, this blog has been careful not to over-hype the cliff. We’ve written that a compromise between Republicans and Democrats was easily achievable; the numbers weren’t unmanageably different and both sides had publicly agreed to make concessions. We’ve said that our beloved congress members would never actually let a series of automatic spending cuts and tax hikes worth 5% of GDP sink the economy – they’d get it together and strike a deal eventually. We’ve likened the debate to that of the debt-ceiling, in which the drawn-out threats of defaulting on our credit were more political theatre than realistic outcomes. We’ve also argued that the “cliff” isn’t really a cliff at all, since legislation could easily be enacted past the deadline to right the ship.

Continue Reading...

The Bush Tax Cuts have been the spotlight of fiscal cliff negotiations. Sure, there are plenty of other bargaining chips on the table, but none is more spoken of than what to do with the expiring 2001/03 Bush era tax cuts. It’s not a yes/no debate, either; with President Obama winning re-election only one thing is certain – they will expire for some income earners, or no deal. The question then is for what income thresholds, for how long, and what specific deductions should be rid of and for whom. Amidst this negotiation is the larger question of what effect different plans will have on the economy, and the answer is something both sides use to support their arguments.

Continue Reading...

Amidst the ongoing political negotiations and obsessive media coverage of the “fiscal cliff,” many politicians and economists are pleading for a re-branding of the term. Whether or not it should be re-dubbed a fiscal slope, gradual fiscal slope, fiscal curve, taxmageddon, austerity crisis, or other less exaggeratory terms is a matter of opinion; but it doesn’t take an expert to realize that the mandatory budget cuts and tax hikes that will go into place at year-end unless a deficit-reduction deal is struck isn’t quite the doomsday that the word “cliff” implies. As Ed Ardeni, president and chief investment strategist for institutional investor advisory Yardeni Research, put it: “We’re not going to fall off the edge of the earth at the beginning of next year. When you fall off a cliff you die. So it’s a bit of an exaggeration to say that’s what we’re facing here.” Similarly, Sen. Bernie Sanders (I-Vt.), noted that even if we go past the deadline by a month or two, “I don’t think a whole lot of people will know the difference…it’s not like something cataclysmic happens on Dec. 31.”

Continue Reading...