By Wednesday morning, we'll know who our next President will be so we don't need to talk about that anymore. But, instead of all the campaign mud-slinging and name-calling, we should have had more constructive discussion about the "Fiscal Cliff" that we face on January 1, 2013. I think this issue is even more important than who wins the Presidential election.
I'm sure you've heard a lot of talk about the Fiscal Cliff, but what you haven't heard are specific actions to address it. Do you really know what's at stake? Well, if Congress fails to take action, we will all face higher taxes and drastic spending cuts on January 1, 2013. I'm not talking about 'tax the rich' changes, I'm talking about rolling-back all the Bush tax cuts that have been in-place since the first George Bush was President. Everything from much higher estate taxes, lower child tax credit, higher marginal tax rates, and higher capital gains & dividend rates.
I read a full-page ad in today's Wall Street Journal estimating the tax increases and spending cuts that are currently scheduled for January 1, 2013, total over $600 billion!! Remember, we're talking about the need for Congress to take immediate action. Based on their performance for the last couple years, I think it's unlikely any meaningful action can be negotiated, modified, approved and sent to the President before the end of 2012. What message will that send to the rest of the world about our sense of responsibility? How will the financial markets respond to such changes?
Unfortunately, there is not much any of us can do to avoid the Fiscal Cliff, except demand that our Senators and Representative do their job and take action! Is that really too much to expect from our civil servants?
In the meantime, get ready for higher taxes in 2013.