The deal went down, but spending and taxes will not. At least this is what will come of the "fiscal cliff" deal that the House of Representatives passed on Tuesday. Lawmakers in Washington would have us believe that they saved the day, but did they? Ben Swann, from Fox News 19 in Ohio, pulls the mask off of the 'fiscal cliff' deal and exposes the ugly truth of what it really is.
Swann begins by reminding us of the rhetoric we all heard during the debates about the "fiscal cliff." The core of the arugment was "that the richest Americans would have to pay more" and thereby "sparing the middle class" from tax increases. This is what the media and the politicians sold to America. But now that the deal is done, is this what really took place?
According to the bill, those individuals who make $400,000 or greater will be taxed at a rate of 39.6%, while married couples who make $450,000 will face the same tax rate. That's an increase from the previous rate of 35%.
Additionally, the Estate tax will have a top rate of 40%.
The bill also provides for a 5-year expansion of the Child Tax Credit, the Earned Income Tax Credit, and $2,500 Tax Credit for College Tuition.
The deal also extends unemployment benefits for the long-term unemployed for one year.
This is supposed to raise tax revenue significantly, right? Wrong. For all of the fighting over the "deal," the amount of revenue projected to be raised, as a result of this bill, is $620 billion over the next ten years! That's just about half of the deficit spending we've seen each year over the past five! This bill predicts revenue to be only increased by $62 billion per year!
To help demonstrate that $62 billion in comparison to our spending, the U.S. spends $3.4 trillion every year and $1.3 trillion of that is borrowed money! At the current rate of spending, the federal government will eat up that $62 billion in just two months!
Swann points out that the $1 trillion in spending cuts that were supposed to go into effect this year from last year's debt ceiling fight, called sequestration ($500 billion from domestic programs and $500 billion from military spending), the bill now delays those for at least two months.
In addition, the bill does not protect against the expiration of the payroll tax reduction. This means that 80% of Americans who make over $40,000 a year will see their taxes go up. According to the Tax Policy Center, those making between $40,000 and $50,000 will see an average tax increase of $579 in 2013. Those that make between $50,000 and $75,000 will see an average tax increase of $822.
"But it wouldn't be Washington," Swann says, "without special interests tax breaks and those are in this bill as well." What are those special interests?
$430 million for Hollywood through "special expensing rules" which encourage TV and film production in the United States.
$331 million for railroads in tax breaks.
$222 million for Puerto Rico and the Virgin Islands on taxes collected on rum.
$70 million for NASCAR by extending a "7-year cost recovery period for certain motorsports racing track facilities."
$59 million for algae growers through tax credits.
$4 million for electric motorcycle makers by expanding and existing green-energy tax credit.
Swann sums up what it means for you and me. "Congress cut virtually nothing from its own budget, but had no problem cutting into the budgets of Americans making $40,000 a year and up."
"At the end of the day," says Swann, "this whole fiscal cliff drama was nothing more than political theater with the same end result: Government raising taxes on those they promised not to raise taxes on and spending more money than ever."
How does it increase spending you ask? According to the Congressional Budget Office (CBO), the bill increases spending by $4 trillion over the next decade!
Obama disagrees with Swann, but then we know Barack Hussein Obama is a liar anyway.
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