Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
The Fiscal Cliff is the name given for the 2013 increase of Federal Government taxes and budget cuts. The Bush-era tax cuts expire and the 2013 "Budget Control Act" kicks in, among other budget cuts & new taxes. The Fiscal Cliff is set to reduce the 2013 US Government budget deficit by roughly half; will remove $607 Billion from economy (GDP), resulting in 4% drop, pushing it back into recession; it can NOT be avoided. It must happen to fix the budget deficit; any delay must be paid for later; it will NOT reduce the US debt, only slow down the growth. The Fiscal Cliff's (new taxes and budget cuts) size and impact are visualized below in physical $100 bills.
New Taxes…
Beginning 2013, Americans are to pay more in taxes.
Bush era tax cuts, FICA 2% payroll tax cuts & other tax provisions will expire, Obamacare taxes will show up – this amounts for $400 Billion in new taxes.
Each truck holds $2 Billion, each line is 1.36 miles (7217 feet), for a total truck line length of 2.73 miles, worth $400 Billion.
This is how it could look if taxes were paid physically, instead of electronically.
$222.7 Billion Bonus: Corporate Tax Subsidies
While the taxes are increasing significantly on American citizens, the largest corporations have enjoyed corporate tax loop-holes.
280 of America's largest companies got $222.7 Billion in tax-breaks between 2008-10, while all of them remained profitable.
67 of the 207 companies' paid effective three-year tax rate of less than 10 percent– far from the 35% corporate tax code.
Budget Cuts…
The Fiscal Cliff will cut $207 Billion out of Government budget: $65 Billion in cuts will come from "Automatic Sequestration", a fancy name for automatic spending cuts that are the consequence of the "Super Committee" failing to come up with a plan to cut $1.5 Trillion over 10 years, which they had to do in order to avoid the "Automatic Sequestration".
The sequestrations cuts will be divided equally between Defense and Non-Defense spending.
$26 Billion in cuts will come from the Unemployment Benefit Extension expiring.
$11 Billion in cuts will come from reduction in Medicare Payment Rates.
$105 Billion will come from other spending reductions.
Source: Demonocracy
