The worst part of the fiscal cliff deal isn’t the specifics — though they do stink. It’s being reminded again how utterly detached Washington is from reality.
The question, now that we’ve finally hiked taxes on the rich (and doesn’t everyone feel better knowing that life is that much fairer?), is: How are we going to continue paying for the government we’ve been promised? As it turns out, raising tax rates on the “wealthy,” the most pressing issue of the Obama Age, amounts to a mere $62 billion of new revenue a year.
To put it in perspective, the deficit spending this year alone was more than $1 trillion. So the fiscal deal will supposedly bring in $620 billion in new revenue over the next decade, which is less than any year’s worth of debt under President Barack Obama. If redirecting resources from private-sector investments to green energy subsidies feels like a victory, congratulations.
But if you’re not a class warrior, a Hollywood studio, a maker of electric motorcycles, a booze producer from Puerto Rico, an algae grower or NASCAR — all of which are subsidized in the bill — you’re out of luck. For the rest of you, there are higher taxes. The expiration of the payroll tax holiday means that Washington will continue to pretend Social Security and Medicare are “paid for,” and according to the Tax Policy Center, 77 percent of you will see your taxes rise an average of $1,635 per year.
The “American Taxpayer Relief Act of 2012,” indeed.