Welcome to DU! The truly grassroots left-of-center political community where regular people, not algorithms, drive the discussions and set the standards. Join the community: Create a free account Support DU (and get rid of ads!): Become a Star Member Latest Breaking News General Discussion The DU Lounge All Forums Issue Forums Culture Forums Alliance Forums Region Forums Support Forums Help & Search

alp227

(32,058 posts)
Tue May 22, 2012, 07:54 PM May 2012

CBO: Taxmageddon would throw U.S. back into recession

Source: Washington Post

Tax hikes and spending cuts set to take effect in January would suck $607 billion out of the economy next year, plunging the nation at least briefly back into recession, the nonpartisan Congressional Budget Office said Tuesday.

Unless lawmakers act, the economy is likely to contract in the first half of 2013 at an annualized rate of 1.3 percent, the CBO said, before returning to 2.3 percent growth later in the year.

Canceling those tax and spending policies would protect the recovery in the short run and encourage more vibrant growth, around 4.4 percent, in 2013, the CBO said. However, unless lawmakers adopt policies that would reduce budget deficits by a comparable amount down the road, the CBO said, the national debt would continue to climb, imperiling future economic growth.

The report, “Economic Effects of Reducing the Fiscal Restraint That Is Scheduled to Occur in 2013,” comes as policymakers are bracing for the most consequential battle over government tax and spending policies in years. The George W. Bush-era tax cuts are set to expire on Dec. 31, along with a payroll tax cut proposed by President Obama. Meanwhile, sharp cuts are scheduled to hit the Pentagon and other federal agencies to meet a deal cut during last summer’s showdown over the nation’s debt limit.

Read more: http://www.washingtonpost.com/business/economy/cbo-taxmageddon-would-throw-us-back-into-recession/2012/05/22/gIQAblvliU_story.html



Thom Hartmann had a debate with a Heritage Foundation analyst about Taxmageddon. It appears that Heritage coined that neologism with a policy brief from early Apr. 2012: "Taxmageddon: Massive Tax Increase Coming in 2013".

19 replies = new reply since forum marked as read
Highlight: NoneDon't highlight anything 5 newestHighlight 5 most recent replies
CBO: Taxmageddon would throw U.S. back into recession (Original Post) alp227 May 2012 OP
Let me predict............. Swede Atlanta May 2012 #1
So is this just a ploy to protect the Bush tax cuts? starroute May 2012 #2
The Heritage Foundation has nothing to do with the Congressional Budget Office. nt TheWraith May 2012 #4
No, but they're the ones calling it Taxmaggedon and stirring up panic starroute May 2012 #9
"Taxmageddon" is the Washington Post's headline. TheWraith May 2012 #10
anything other than keeping things the way they are now AlbertCat May 2012 #11
I'd say so... but is the CBO under their control as well? freshwest May 2012 #7
Forget taxing the 1%. Tax Republicans. Track them. Tax them. nt onehandle May 2012 #3
Do them almost like Rush ordered the minions to do liberals: Hunt them down with dogs. Instead... freshwest May 2012 #8
Taxing the wealthy, while keeping the tax cuts for the middle class DearAbby May 2012 #5
Sounds almost like Democrats were right and Republicans... Fearless May 2012 #6
Then no cuts then Iliyah May 2012 #12
But Nobody Is Talking About Either Scenario DallasNE May 2012 #13
And the fourth option: total destruction of the GOP sofa king May 2012 #16
Tax the rich at above 34% magic59 May 2012 #14
Haven't watched the viedo but the articles I have read on this must be leaving something out underpants May 2012 #15
Probably depends on who the taxes and benefit cuts hit Trillo May 2012 #17
Still Best, Sir, To Grasp The Nettle And Restore the Former Tax Rates The Magistrate May 2012 #18
"Taxmageddon?" Oy. (nt) Posteritatis May 2012 #19
 

Swede Atlanta

(3,596 posts)
1. Let me predict.............
Tue May 22, 2012, 08:02 PM
May 2012

how the GOP will respond, if at all, to this report....

(1) The sky is falling, we cannot let the Bush tax cuts expire, at least not for the rich ones, cuz they are creating millions of jobs (at minimum wage)

(2) We can reduce the spending cuts but only for the military. We still want to eviscerate Social Security Medicare, Medicaid and anything that actually benefits a live human being.

starroute

(12,977 posts)
2. So is this just a ploy to protect the Bush tax cuts?
Tue May 22, 2012, 08:04 PM
May 2012

The involvement of the Heritage Foundation suggests that it is.

starroute

(12,977 posts)
9. No, but they're the ones calling it Taxmaggedon and stirring up panic
Tue May 22, 2012, 08:21 PM
May 2012

The CBO report amounts to saying that the currently mandated mix of tax hikes and budget cuts could set off another recession.

How that is dealt with is a matter of choice. For example, one possibility is letting the Bush tax cuts expire and spending the money on infrastructure.

But the Heritage Foundation is clearly out to convince people that anything other than keeping things the way they are now (with the presumable exception of cutting entitlements) would be disastrous.

TheWraith

(24,331 posts)
10. "Taxmageddon" is the Washington Post's headline.
Tue May 22, 2012, 08:31 PM
May 2012

The CBO isn't making any argument except that the currently slated policies for next year would provoke another short recession.

 

AlbertCat

(17,505 posts)
11. anything other than keeping things the way they are now
Tue May 22, 2012, 08:31 PM
May 2012

Exactly.

Of course keeping things the way they are now will also cause a recession.




We know what to do. The solution is not elusive. Tax those who can afford it. Give those who cannot a break. Invest in infrastructure ... which cannot be outsourced overseas. Cut military waste.

freshwest

(53,661 posts)
8. Do them almost like Rush ordered the minions to do liberals: Hunt them down with dogs. Instead...
Tue May 22, 2012, 08:17 PM
May 2012

Of shooting them, leave a few as an example of fossils?


DearAbby

(12,461 posts)
5. Taxing the wealthy, while keeping the tax cuts for the middle class
Tue May 22, 2012, 08:11 PM
May 2012

Would not plunge the country into recession. Bullshit. Just another way for the wealthy to scream "It's the end of the world as we know it"

DallasNE

(7,403 posts)
13. But Nobody Is Talking About Either Scenario
Tue May 22, 2012, 11:17 PM
May 2012

Plus, it is not an either or situation.

Why wasn't the CBO asked to score the third option? What is that 3rd option? Keeping the tax cuts for low and medium income taxpayers while letting the Bush tax cuts for the top 2% to expire while following closely to the Simpson-Bowles recommendations on spending plus the defense savings from winding down the Afghanistan War.

Lastly, the CBO report has no mention on the impact on jobs and that makes the report somewhat meaningless.

sofa king

(10,857 posts)
16. And the fourth option: total destruction of the GOP
Wed May 23, 2012, 07:49 AM
May 2012

All we have to do to show the American voter who is on their side and who isn't is to split the tax cut extensions into two bills, one for the rich and one for the middle class.

The GOP is only there in DC to do one thing, make rich people richer. To protect that, Republicans will be forced to block and hold hostage tax cut extensions for the middle class, in an attempt to pass the cut they really care about.

From that point, no matter what the outcome, voters will know and remember that it was the Republicans who tried to raise taxes on the middle class, and tried to take money out of the wallets of something like 70% of all voters, to keep people none of us know personally fabulously wealthy.

I expect the Democrats in Congress to get that ball rolling in only a few weeks.

 

magic59

(429 posts)
14. Tax the rich at above 34%
Tue May 22, 2012, 11:19 PM
May 2012

and cut military industrial welfare and you will see the biggest economic boom since the 50's. No need to cut programs for the poor.

underpants

(182,901 posts)
15. Haven't watched the viedo but the articles I have read on this must be leaving something out
Wed May 23, 2012, 07:02 AM
May 2012

They all seem to say that ALL of the Bush tax cuts have to left alone when in fact the CBO report probably only means the middle class tax cuts. There were middle class cuts in the Bush plan (not as large as Obama's of course) and no reasonable economist nor any historical evidence would suggest that the tax cut for the top did anything to create jobs OR weren't devastating to the budget/debt - in fact the top cuts were meant to create the debt "starve the beast".

Trillo

(9,154 posts)
17. Probably depends on who the taxes and benefit cuts hit
Wed May 23, 2012, 01:43 PM
May 2012

We could slash corporate welfare, and tax the rich, ...
or
We could slash food assistance, welfare, child care, schools, and increase low-income taxes and fees.

So, it seems a matter of priorities.

Latest Discussions»Latest Breaking News»CBO: Taxmageddon would th...