My Take On The (so called) Fiscal Cliff

     On Jan. 1st my taxes are going to go through the roof, and no, I don't make anywhere near $250,000.00 a year. So what is my offense that my taxes would raise so dramatically? I'm Self-Employed.
     Yeah, I'm one of those guys that has escaped the slavery of funneling 80% of what I make up to a boss whose only real job is to count his money. At the same time I've never felt comfortable with being that boss. I'm rather proud of the fact that I don't live off of the labors of others. In tax terms I am what is called a Sole Proprietor. My business license number is my social security number. In other words, there is just me. I do every aspect of my business from start to finish. And I like it that way.
     But come tax time I get walloped!  The reason is called Payroll Taxes. Those that are self-employed have Payroll Taxes that are exactly twice as high as everybody else.  Under normal circumstances the employer pays half and the employee pays half. But since I am both employer and employee I get to pay both sides!
     Okay, so that makes a little bit of sense, and it's better than having a boss or employees, but nevertheless it is painful. However these last couple of years there has been what's called the Payroll Tax Holiday, and it's made a real difference for me. The problem is that it's set to expire in a couple of days and it looks like it will.

     With all this Fiscal Cliff bickering about whether Monte Burns types will be able to afford more ivory back-scratchers, this tax hike on American workers has been largely ignored in the news. Here is a Slate article on the subject, and another one from CNN Money.  And don't think it won't hit you too. Maybe not as hard as it hits me, but if you have a job you might want to prepare for smaller paychecks starting next week. Fun, huh?

     So we all know the U.S. Debt is out of control, and it needs to be fixed.  That's what all this is about, right? That's why they set up the Fiscal Cliff to begin with. It really just makes me laugh the way everyone but everyone seems to agree that the Fiscal Cliff is such a disastrous thing. Look at the name we've given it. We're like a bunch of children throwing a national tantrum because we don't want to take the medicine that will make us healthy again. Something needs to be done about this National Debt, and there are really only two ways of dealing with it. We either raise more revenue (with taxes) or we cut spending. ( or really a bit of both.) One way or another, it's not going to be fun. I don't want to pay more in taxes. I'm barely making it as is. But I'm certainly not one of those heartless *ssholes who wants to cut the pittance we spend on the very poor in food stamps and the like. I've been on Food Stamps myself, and I can tell you first hand that you've got to be in pretty lousy shape to qualify, and even then it's not much.

     Last year when the GOP held the country hostage over the debt ceiling and our responsibilities in paying our obligations which resulted in jittery markets, prolonged recession, and getting the US credit rating dropped... you remember that fiasco don't you?  Well in the end Democrats and Republicans finally did come up with a compromise. It was called the Budget Control Act of 2011 and implemented something called Sequestration that cut $1.2 trillion in spending over ten years.  It was a hefty cut no doubt, but when you consider that our debt is at 16 trillion it seems a little more reasonable. Half would come from Domestic spending (like Food Stamps) and half would come from defense spending. The following chart shows how much we already spend on the military.

     So as an aside-- This last year I began studying to become a Sound Engineer at the local Community College. (SLCC) This has been a dream of mine for some time now, and the only way I have been able to afford it is because of a Federal program called Vocational Rehabilitation. It was determined that I had a disability (Carpal Tunnel Syndrome) which affects my ability to continue my current work. (buffing scratches out of cars) Now I don't know if this funding of my schooling is on the chopping block or not, but I wouldn't doubt it.
     As a left-leaning democrat I winced at the idea of such deep cuts in domestic spending anyway, but I would be especially upset if I weren't allowed to continue with my Sound Engineering studies. However the prospect of slowing our national killing machine is too good to pass. When this Sequestration was passed  I decided then and there that that the trade-off was well worth it. Despite being rather alone in this position I have been a strong proponent of allowing Sequestration to stand ever since.

     So as I've watched these Fiscal Cliff negotiations I've been pretty disappointed. I make about $30K a year so my income tax probably won't go up. (I think they'll come to some sort of a deal on that.) But my Payroll Taxes are going to skyrocket. It hardly matters how they take the money, they're still going to take it. In addition, the most Obama's even proposing in cuts to the military is $100 billion over 10 years. So it looks very likely that come Jan. 1st I'm going to have to come up with a lot more money for our bloated military and their war machines. As you can imagine, I'm not very happy about it.