Grading the Fiscal Cliff Deal
Cato scholar Daniel J. Mitchell comments, “This deal is not good for the economy. It doesn’t do anything to cap the burden of government spending. It doesn’t reform entitlement programs. …
First, the good news: Oh, wait, there isn’t any.
Now for the bad news.
The top tax rate will increase to 39.6 percent for entrepreneurs, investors, small business owners, and other “rich” taxpayers making more than $400,000 ($450,000 for married couples). This is Obama’s big victory. He gets his class-warfare trophy.
The double tax on dividends and capital gains climbs from 15 percent to 20 percent (23.8 percent if you include the Obamacare tax on investment income).
The death tax rate is boosted from 35 percent to 40 percent (which doesn’t sound like a big step in the wrong direction until you remember it was 0 percent in 2010).
The alternative minimum tax will still exist, though it will be “patched” to protect as many as 30 million households from being swept into this surreal parallel tax system that requires people to use a second method of calculating their taxes – with the government getting the greatest possible amount.
Unemployment benefits are extended, ensnaring more Americans in joblessness.
Medicare spending is increased as part of a “doc fix” to increase reimbursement payments for providers.
https://www.cato.org/blog/grading-fiscal-cliff-deal-terrible-could-be-worse