In fact, because it is super-regressive, it's 2% of your first $110k of gross pay, and 0% (as in zero) after that. So if you have a two-income family with $220,000 of gross pay, the hit is $4,400. One household earner, the same gross $220k? Half as much. Etc.

When in debt we should stop spending and start paying the money back. That means everyone has to take a hit to be fair. For the MS media it should be the highlighted part of the story, not a glossed over detail.

I always believed that with enough New Year’s Eve inebriation our congress could accomplish almost anything. But will they regret anything the morning after?

Actually, everyone doesn't have to take a hit. But assuming for the sake of argument that that's true, the hit to the middle class may turn out to be a larger percentage of their income than, say, somebody making $200K-300K. And if you're Dick Cheney living off municipal bonds, you just laugh your head off at all this.

Obama has been true to the wimp form he first
exhibited righ after he was eleced.

The administration's "accomplishment" las night was just another exercise in kicking the can down the road.

In his desperation o appear like a leader, he gave away the tax package he and we needed, an illusory tax increase leaving h e rich basically untouched, and left spending cuts hostage to yet another repgnican mugging three months down the road.

Here's a clue: Taxes have to go up. Everybody's taxes. Substantially. Spending has to come down. All spending. Substantially.

Neither the repugnican base nor the demonrat base like that set of twin truths.

So instead of any actual change, we have the ongoing charade.

But the pols on both sides get to announce a "deal" as if a "deal"is the actual goal. A "deal" wasn't what was needed, what was needed was rational fiscal policy without either side's ideological idiocy driving the policy.

And as usual, big money, on he left and right, talked and every special interest group got a continuation of their olwn preference payments out of the Treasury, and the can was kicked down the road again.

Beer there should have been no deal, and the tax increases and spending cuts actually went into effect for a couple of years.

I've got a suggestion for a New Year's resolution for you: Use a different keyboard.

With the rapidly declining labor force participation rates under Obama and growing Federal Government employment rolls, and the base of state and local employees outside of the system, we're getting close to the point where most aren't affected by reinstatement of the payroll. So maybe this is a populist, redistributive move after all.

Beer there should have been no deal, and the tax increases and spending cuts actually went into effect for a couple of years.

I'll drink to that.

I am with you Jack, the original tax "holiday" was a sick joke taking money away from programs that are already insolvent in the long term.

The coverage of this has been horrible and I wonder how many people are going to notice that first check in January is a little lighter?

I don't mind paying my fair share, as long as we start working on the problems, not give away tax money to countries and companies where our ROI is horrible (I am looking at you GM and Pakistan).

http://www.foxnews.com/politics/2012/12/31/obama-gives-congress-pay-raise/

how many people are going to notice that first check in January is a little lighter?

It's not "a little." If you make $3000 a month gross, you're going to notice $60 less net.

Pretty sad. Remember how everyone was ga ga in 2007-08 for this guy? He has 5 years to basically figure things out, and the policy churned out is 1) Congressional pay raises and 2) a 2% increase in payroll taxes. Yeah, that will turn the economy around.

Meanwhile, President Obama gives legislators a pay raise. I am so disgusted with the whole lot that they will have to pry taxes from my cold, dead hands.

A few of you touch on it, but I feel the media from all sides has more to do with this latest camouflage fiscal disaster bill. Media should carefully refute all the hyperbole coming out of the President and members of Congress. That includes all the months Obama kept claiming we wanted to protect the middle class.

$3,000 gross? HAH!

That 2 percent means a lot to me. I'm not even in the middle-income bracket.

So the very few extras I've allowed myself (I'm talking a gym membership, which I need for my health as I'm on the shady side of 50, plus Amazon and Netflix on demand) will have to go.

Already, I never go to restaurants, unless somebody else is footing the bill; I rarely buy clothes and shoes (I do buy DSL Internet), I don't have cable or a smartphone. I don't have credit cards. My "extra" budget (which has covered food treats, some organic foods and the aforementioned gym membership, Amazon and netflix) is slim.

And after this "deal," gone. Hopefully, I can hang on to the DSL.

Rick Newton:

Meanwhile, President Obama gives legislators a pay raise.

Me:

I wonder if all of those long-time suporters of higher pay for congress-critters still believe that higher pay leads to higher quality legislators.

Bob Tiernan
NE Portland

YO! Is anyone surprised? Y'ought not be. This was the plan from the get-go.

If anyone knows a tax law professor, please ask them if tax and spending bills are still supposed to originate in the House of Representatives.

Many years ago, I was taught money issues went from House, to Senate, to the President. Now, it seems exactly reversed.

What the heck are the little people supposed to think about all of this?

Perhaps running off the fiscal cliff is the only way to dislodge and unravel the Executive Branch-Congress' fiscal suicide pact they like to refer to as the federal budget.

They all seem to acknowledge that fiscal calamity is inevitable and yet all they seem capable of doing is no better than arguing about the means to keep their own names off the country's tombstone?

I heard Mitch McConnell refer to the Senate bill as "imperfect".

Wow, the seasoned senior Senator makes an observation any halfwit in America could make. Now that's confidence building.

Are remedy and success are right around the corner of a few more congressional raises?

Should we view it as essentially the whole country being run by a Sam/Rand-like band of thoroughly incapable and conflicted phonies pretending to be taming a massive beast they lost control of many years ago.

And when they later raise the debt ceiling it too will be "imperfect".

As we listen to more tired floor speeches and stale presidential pronouncements
are we supposed to be encouraged because things could always be worse?

Sure, why not?

In the absence of hope we reside in despair.

President Obama gives legislators a pay raise.

An interesting quirk in the bill passed by the Senate is that it calls off the federal pay thaw -- including congressional pay rates -- that Obama instituted late last week. So for senators and congressmen, voting for the bill involves rescinding a pay hike for themselves.

When in debt we should stop spending and start paying the money back.

It might have meant more to hear this from you back in, say, 2003.

Doesn't matter. The House is in full pouting mode, and will not pass this bill, but send back some kind of grotesque mess to the Senate, whereupon rinse and repeat.

"But what we don't like is watching the toupees of Washington, D.C. slip it to the public without the mainstream media calling them out on it."

So which of the two must be prosecuted for fraud first - Wash.D.C. or massmedia?

"It might have meant more to hear this from you back in, say, 2003."

I do recall some serious horror at starting a couple of big expensive wars and cutting taxes at the same time. What nincompoops we are that 10 or 12 years seems like ancient history.

I could care less about the congressional pay raises one way or the other. That's the least of the damage they and the system do.

I am currently horrified at the raising of the medical tax deduction eligibility limit from the current 7.5% to 10% of adjusted gross income. I don't know how many people this hits but it is expected to raise $400 million in 2013 and 15billion by 2019. These are people with large unreimbursed medical expenses. Seems kind of a wicked way to raise money for Obamacare. When you have these kind of expenses in a year you are already hurting.

Dear Sally, if a tax at your marginal federal rate on another 2.5% of your adjusted gross income is horrifying to you, you have my sincere respect. That AGI number must be a big one in your case.

Someone with a better calculator than mine can tell us how much a high-income couple can save by divorcing, with the makimum rate now kicking in at $400,000 for individuals and $450,000 for (heterosexual) married couples..

Dear Allan, we're not talking about large AGI numbers; we're talking about large medical expenses. Every penny of mortgage interest is deductible, but only medical expenses in excess of 7.5% of AGI currently and 10% starting next year. Picture an adjusted gross income of $50,000 and unreimbursed medical expenses of $12,000 and maybe you will see what I am talking about. This is not a tax on rich people; this is a tax on people who for whatever reasons (and they're never fun, are they) have large medical expenses -- still also the single largest cause of personal bankruptcy.

I think this was a sneaky and mean way to raise some of the money paying for Obamacare, which I still believe will raise, not lower, the ridiculously high percentage of GDP that goes there in this country.

Sally, I understand that unreimbursed medical expenses can be crushing. I was looking more narrowly at the tax change proposed by the Senate bill, which would reduce the deduction on your facts from $8,250 to $7,000, producing a tax at the marginal rate (15% or 25%, most likely, depending on filing status) on $1,250 of roughly $200 to $300.

To me the real issue here is the level of unreimbursed medical expenses. Our medical costs are way too high, and our access to effective insurance is way too limited.

Sally:

I do recall some serious horror at starting a couple of big expensive wars and cutting taxes at the same time.

Me:

Like most others, you keep confusing cutting taxes with cutting tax rates. If you look at the amount of tax revenues taken in by the IRS all that time you'll see that it went up every year. Spending, of course, always outpaces this.

As for the wars, it's hard to argue against doing something about Afghanistan since that one was started already and nearly everyone agreed that something had to be done about the camps therer and those who allowed them to be there. Iraq was the optional one, and even then paying for it was hardly the same thing as creating a new $100 Billion per-year program in late 2002, giving it a 10% budget increase each year, and never getting rid of it. War spending winds down dramatically, but the four or five major spending programs we have have been ballooning like crazy since they were created.

Get rid of the $800 Billion war spending since 2001 and we still have a huge structural mess on automatic, with far too many cowards in Washington.

By the way, have you noticed the huge mess in most EU countries, most of which do not have large military budgets to blame this one. California, too. Gee, how'd that happen?

Bob Tiernan
NE Portland

So there are still some around that believe in the Laffer curve? That's a good one.

Many years ago, I was taught money issues went from House, to Senate, to the President. Now, it seems exactly reversed.

The bill that the Senate passed is technically a House bill, which has been "gutted and stuffed." The rule that tax measures must originate in the House is contained in the Constitution. Like many constitutional provisions, it is a bit of a joke.

"By the way, have you noticed the huge mess in most EU countries, most of which do not have large military budgets to blame this one. California, too. Gee, how'd that happen?"

I have noticed. I did happen to listen to a woman from the estimable Hoover institution a month or so ago proclaim that the United States' military spending -- more than half of the total global military spending -- in so many words is indefensibly absurd.

It needs to be on the table, but I speculate that owing to structural political economics and cultural never-ending cumulative guilt over Vietnam it won't be.

I agree that is not the whole picture. But as far as the war in Afghanistan, the Russians must be laughing, yes? How long until we leave?

"Our medical costs are way too high, and our access to effective insurance is way too limited."

"Medical insurance" as currently defined makes no sense to me whatsoever; neither do our obscenely high medical costs -- nationally and sometimes personally. In this obscene system I have long thought it would make more sense -- except, apparently, for revenue-raising -- to make every penny of unreimbursed medical expenses deductible. Every penny of mortgage interest but not unreimbursed medical? That is only because mortgage spending is at some point discretionary. And the real estate industry is powerful; the medical industry not subject to the same machinations.

Your boy in the White House made it even worse.

I do not understand how anyone can pass a budget without serious spending cuts and say "...wooohooo! What a difference we just made..!!...". You can raise taxes on everyone to the point of full confiscation and if spending doesn't come under control, we'll be trying to explain this one to our grandkids....

ltjd:

from the Speaker's website: “The House has already passed bills addressing the fiscal cliff. We passed a bill replacing the President’s sequester with responsible spending cuts and did it last May. We passed a bill to stop all the tax hikes on the American people scheduled to take effect January 1, and we did that on August 1. And we’ve proposed plans over and over again that Democrats used to support, but now they won’t."

"Boy" in the White House? Good one, Sally.

Allan:

So there are still some around that believe in the Laffer curve? That's a good one.

Me:

The principle is valid. There is indeed a point or extremely narrow range (if multiple rates are used) which will maximize revenues. The size of the economy from which the tax revenues will be extracted will of course always be influenced by other factors.

At the same time, I don't agree that revenues must be maximized.

So, are you one of those people who still believes that the wealthiest once paid taxes at a 92% rate? That's a good one.

Bob Tiernan
NE Portland

The principle is valid.

Bob, you are out of date. While the Bush tax cuts are viewed by Your People as paying for themselves, it appears that when the same tax rates are extended by action of the Democrats, they suddenly are very expensive.