Having bridged the fiscal cliff early in January, the March debt ceiling crisis will feature a White House attack on tax deductions and exemptions, in a continued Administration attempt to keep the pressure on high bracket tax expansion, rather than accede to government program cutbacks.
With the federal debt now exceeding 102% of the nation’s gross domestic product, this is double the percentage reached in 1990. The widening gap between the GOP-controlled House of Representatives and the Obama Administration reflects the equally growing ideological schism that will be emphasized; at least until a further test of the U.S. voter pulse in November 2014.
It is now becoming clear that the Administration, in concert with the U.S. Senate, and the Democrat minority contingent in the House of Representatives, will make every effort to further pressure the nation’s financial upper strata by closing most, if not all, deductions and exemptions, which have greatly reduced the taxable income available from millionaires, billionaires, and large publicly-held corporations.
Coming on the heels of the New Year budget battle, which hit both the upper 2% adjusted gross income tax sector, as well as greeting the middle income earners with the reinstatement of the Social Security withholding tax, the passage of such additional taxation, together with foot-dragging on sequestration may generate the unintended consequences of further undermining the embattled debt stabilization.
This repeated attempt to hold business and high earners hostage to a presidential desire for greater fleecing of small business and major income producers, rather than introducing a newly-crafted federal income tax system where all can pay their fair share, which now exempts almost one-half of the income-earning population.
It’s obvious that such a federal tax exempt status for such a large proportion of wage earners is politically motivated to foster an ever-increasing support system, dependent on indefinite unemployment compensation, devoid of tax-paying responsibility.
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