Both parties gave in ‘good deal’
To the editor:
Everybody from both the right and the left seem to be second-guessing Congress’s fiscal cliff last-second deal that averted a financial meltdown for now. That’s too bad, it’s a good deal.
We had been happily living with the lowest taxes of my seven-decade lifetime without paying for two wars and a demographic cliff caused by a rapidly aging population coupled with out-ofcontrol health care cost escalation.
Higher taxes were both necessary and inevitable in addition to difficult belt-tightening which must still come. Both parties gave something and that’s critical for the future.
Democrats ended the 2 percent tax holiday on Social Security withholding, which had to happen for the benefit of everyone – that’s a big concession given the certainty that it will hurt our economy short term. And it’s a major tax increase for all wage earners – about $1,000 per average family.
Without the cover of the Cliff this move would have been politically impossible. They also were generous on the inheritance tax front which will preserve successful job creating small businesses and family farms.
Republicans got past their simplistic anti-tax pledge – at a time when both Government and the Private Sector have to be part of any real solution to our economic problems. They did allow tax increases on our top one-percent, who have been scandalously increasing their wealth compared to our hollowed-out middle class. Of course in hindsight the increases could have been better designed with respect to helping our economy with early Republican input rather than months of fierce resistance to the very idea.
Both parties get credit for permanently ending the escalation of the miserably complicated alternate minimum tax by indexing it to inflation; and also indexing the inheritance tax. These changes to tax law were long overdue.
Separating the income tax increase part of the fiscal cliff knot from the bulk of spending cut part also makes sense. If you are a Republican in Congress you now have immense leverage relative to entitlements and you will make a difference in the final outcome. Unless Democrats accept the reality that the average family and their employers will have to pony up more for their safety net through higher Social Security and Medicare withholding, the programs will be gutted with no viable replacements in sight.
But those increased rates couldn’t have been put on this year – as part of a grand bargain – because the economy is too weak. Also with the first tax cliff agreement on income taxes now in place, most of the fix will have to come within the entitlement programs and their statutory funding sources; instead of from the income tax, which would be punting.
The hard choices still to come, like the ones made so far, will be two steps forward, one step back. Nobody will get everything they want, but let’s let the system work and refuse to accept paralysis.
Good luck politicians, you do make a difference and we depend on you to make our Democracy work.