Taxmageddon

You may or may not have heard about this, but given current law, this country will have its biggest tax increase ever Jan. 1, 2013. Taxes will go up an estimated ~$500 Billion dollars.  Immediately.  That is an amount equal to about 20% of total federal government revenue currently. 

Would this help get rid of deficit/debt?  Unlikely.  The .gov almost certainly will not see such an increase in revenue because the estimate assumes people will not change their behavior.  Problem is, we are already seeing people and businesses changing their behavior to prepare for the new taxes.  Less spending/investment, less business expansion, fewer people hired and jobs created. 

The specter of these increased taxes is the single biggest factor creating the current problems in the economy. 


This article is an excellent summary of the issue.

Taxmageddon also contributes to the continuing problem of uncertainty.  As bad as the economic policies enacted by this current administration have been, their incessant discussion about what they might do - what they want to do - is even worse.  Especially given the propensity to use the regulatory process away from voter accountability rather than the lawmaking process.