Taking Stock: Congress could fix what it broke

Malcolm Berko: If tax cuts passed by Congress in 2001 and 2003 are not extended, it would force across-the-board cuts to most government programs and push the economy over a fiscal cliff.
BY Malcolm Berko Published: November 4, 2012
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The exemption on inherited estates would fall to $1 million from $5 million. For those wealthy folks too obtuse to establish a trust, the tax rate above that $1 million exemption would jump to 55 percent from 35 percent. And lastly, a large swath of Americans, those who don't earn enough to pay any of the above taxes, would take a huge hit. The 2 percent temporary reduction on payroll taxes, which supports Medicare and Social Security, expires Jan. 1. What the government giveth it also can taketh away.

On the spending side, defense programs would be slashed by 9.4 percent, and thousands of nondefense programs — such as corporate welfare and cotton, wheat, corn, oil, railroad and land subsidies — would be slashed.

Other cuts include $150 million for healthy marriage promotion, $124 million for seat belt safety, an annual $99 million incentive to raise teachers' pay, $21 million for prisoner re-entry job searches and $7 million for motorcycle safety, to name a few. Medicare would be trimmed by 2 percent, but Medicaid, Social Security and veterans benefits would be exempt for now. Note that I wrote “exempt for now.” And the unemployment rate, not the frangible political numbers but the real numbers, might rise above 16 percent.

I'm reminded of these words from “Les Miserables,” which now seem apropos:

There was a time when men were kind,

When their voices were soft

And their words inviting.

There was a time when love was blind

And the world was a song

And the song was exciting.

There was a time.

Then it all went wrong.

Please address your financial questions to Malcolm Berko, P.O. Box 8303, Largo, FL 33775, or email him at mjberko@yahoo.com.