We're well and truly ::over the cliff:: now.
Taxes are going up on working people and the middle classes at the smart clip of 2% because payroll taxes are reverting to their previous levels with no offsetting reductions or benefits. In other words, the working and middle classes will pay more, to the tune of $1,000 to $2,000 a year or maybe a scoch more or less depending on what their income is, and for some of them at least, $100 or so less a month in take home pay will mean they go over the household fiscal cliff and into poverty; bye-bye. Millions already fall off that cliff every year as it is, so what's a few more, anyway?
The beauty part, of course, is that this is the Social Security payroll tax, and since everybody wants to save Social Security, this additional money going in the kitty will strengthen and preserve it, so there will be no fussing over this tax increase. Of course the devil is in the details, and since SS surpluses are used to pad the rest of the budget, every dime will wind up paying for more wars and such, just you wait.
The rich, well...
They get to pay the 2% more on the first $110,000 of wage income (assuming they have any, don'tchaknow; clipping coupons and collecting rents don't qualify for payroll deductions), so there's that, and they get hit with extra percentages on all their income (so I'm told) above $400,000 for a single person, $450,000 for a married couple. The top income tax rate goes up from 35% to 39.6% (why such a wonky figure anyway?) and capital gains taxes go up from 15% to 20% -- on income amounts above the threshold. And there's a bump up in the estate tax, applicable to a handful of Old Rich People from 35% to 40%.
None of these little adjustments and increases in the taxes paid (or avoided) by the rich will affect their lives and lifestyles in any perceptible way; none will be forced into poverty because of the slightly higher tax rates they will be at least theoretically subject to. Thank goodness. Wouldn't want them brought low, after all. "Jawb creatuhs" and so forth that they are.
Unemployment benefits will continue for up to 73 weeks. The EITC will continue.
These are the payments that keep the out of work and the barely getting by tame enough to prevent a revolt by the masses. Despite all the huffing and puffing about these "wealth transfers", self-preservation is still a paramount objective of Our Betters. Foolish and stupid and cruel they may be, but even they know that cancelling these two payments to the Lesser People would lead directly to rolling out the tumbrils and dusting off the guillotines. Not surprisingly, they don't want that.
The Sequester will be put off for two months while negotiations go on regarding cuts to defense and social program budgets.
Oh, and then there's the Debt Limit which will be addressed, they say, in due time.
All in all, it could be worse, and let's not fool ourselves, it will be. It will be because this is the path to austerity. And austerity is purpose-designed to pick winners and losers and make things far worse for the losers so that things will be ever so much better for the winners.
Of course this all depends on Boner's House going along -- which so far (c. 5:00p MST) they are not.
So there is that.
Interesting. The "news" on the teevee had it that the Senate bill was passed by the House right around 9:00p MST and everyone could go home now, yay. As I write this morning, how some ever (c. 7:00a MST, Jan 2), it is as if news hasn't quite filtered into the blogosphere, which is still caught up in the drama of the conflict over the bill in the House and the question of whether or not it will be passed by the reactionaries (even though there are oddly discordant acknowledgements that (oops!) it did pass.) Very disorienting, but interesting...