CBO: Taxmageddon would bring tax pain but debt relief

[alp227]

Source: Washington Post

While the year-end burst of tax hikes and spending cuts known as Taxmageddon promises to be messy, it would set the nation on a course to smaller budget deficits and lower debt, the nonpartisan Congressional Budget Office said Tuesday.

So, policymakers looking to preserve the current low tax rates should be prepared to cover the cost, the CBO said, or pay a steep price in the form of a rapidly soaring debt that could ignite a European-style crisis on this side of the Atlantic.

“The aging of the U.S. population and the rising costs for health care mean that the combination of budget policies that worked in the past cannot be maintained in the future,” the CBO said with uncharacteristic bluntness in a long-term budget outlook released Tuesday.

“To keep deficits and debt from climbing to unsustainable levels .?.?. policymakers will need to increase revenues substantially above historical levels as a percentage of GDP, decrease spending significantly from projected levels, or adopt some combination of those two approaches,” ideally maintaining deficits at least as low as those projected if Taxmageddon were to strike on schedule.

Read more: http://www.washingtonpost.com/business/economy/cbo-taxmageddon-would-bring-tax-pain-but-debt-relief/2012/06/05/gJQAXFv8FV_story.html

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I originally thought that "Taxmageddon" was a Heritage Foundation neologism, but my search of LexisNexis found this Washington Post article from 2/18/12, "'Taxmageddon' looms at end of payroll tax holiday" (in print as "Tax holiday's end sets up harder hit&quot .

Thom Hartmann debated one of the Heritage stooges about this issue:

[Burke36]

1. CBO: Taxmageddon would bring tax pain but debt relief

[IMG][/IMG]I very much agree with your point of view

[msongs]

2. go to a single payer system and slasha health care costs. there it is nt

[stockholmer]

4. +100000000000000000

[stockholmer]

3. the same CBO just said the same actions would likely throw the US back into recession in 2013

http://online.wsj.com/article/SB10001424052702304019404577420592727486770.html

WASHINGTON—The U.S. economy will likely fall into recession in the first half of 2013 if large tax increases and scheduled government spending cuts are allowed to go into effect in January, the Congressional Budget Office said Tuesday.

The nonpartisan agency's finding could ramp up pressure on policy makers to reach a broad budget deal later this year to avoid such an outcome.

The combination of tax increases and spending cuts, often referred to as a "fiscal cliff," would sharply reduce the federal budget deficit but would temporarily arrest the economic recovery, said the CBO, which serves as Congress's budget calculator.

The CBO projected the economy would contract at a 1.3% annual rate in the first six months of 2013, likely meeting the definition of a "mild recession," if certain tax increases and spending cuts are allowed to take effect next year. The economy would stabilize in the second half of 2013 and grow by 0.5% over the year. The economy has grown at an average 2.4% annual rate since the recovery began in mid-2009.

"The idea of piling another recession on top of such a slow and incomplete recovery is quite horrifying from the standpoint of the well being of average families in this country," said William Galston, a senior fellow at the Brookings Institution in Washington. "It would be unconscionable to permit that to happen if there were obvious policy alternatives."

snip

[nineteen50]

5. We just have to stop

the poor from hoarding their money so the 1% can afford them.