The Fiscal Cliff for Dummies
Discussion
rogerthefish said:
Is the top rate of tax 25% over there and no VAT but a 5% sales tax ?
From the little I know about it, income tax is complicated in the US - you have federal taxes, state taxes and sometimes city taxes too, so the marginal rate is difficult to quantify and will differ from place to place anyway.Sales tax varies too, but is typically around 5% in my experience of a handful of States.
On the flip side, the UK Government pays for a lot of services for UK citizens that the US government doesn't pay for its own. Healthcare and social benefits being the most obvious.
From what I've seen though, the provision of "public" services by private companies leads to massively inflated prices in the US though - a degree from a top university can cost you over £70k in the US, as opposed to £27k here.
Likewise, healthcare costs are ridiculous - an overnight stay, an X-ray and MRI scan after a friend fell off a horse resulted in a cost of $22k for her insurance company. My OH had a week in a Harley Street hospital and major back surgery for about the same. I've had a consultation and MRI scan privately in the UK for £250.
jeremyc said:
JensenA said:
Can someone explain to Mr.Ignorant here, what exactly this 'Fiscal Cliff' is.
I know that if an agreement is not reached, then everyones Taxes will rise and Government spending will be cut, from 1st January Automatically. But who implements these automatic tax rises, and why is it automatic?
Because last time they couldn't agree on cuts/taxes/budgets (in 2010 IIRC) they imposed this deadline after which the cuts automatically come in.I know that if an agreement is not reached, then everyones Taxes will rise and Government spending will be cut, from 1st January Automatically. But who implements these automatic tax rises, and why is it automatic?
It was supposed to ensure that they reached agreement in good time.
That deadline is tomorrow.
So this is a bad thing?
Johnnytheboy said:
jeremyc said:
JensenA said:
Can someone explain to Mr.Ignorant here, what exactly this 'Fiscal Cliff' is.
I know that if an agreement is not reached, then everyones Taxes will rise and Government spending will be cut, from 1st January Automatically. But who implements these automatic tax rises, and why is it automatic?
Because last time they couldn't agree on cuts/taxes/budgets (in 2010 IIRC) they imposed this deadline after which the cuts automatically come in.I know that if an agreement is not reached, then everyones Taxes will rise and Government spending will be cut, from 1st January Automatically. But who implements these automatic tax rises, and why is it automatic?
It was supposed to ensure that they reached agreement in good time.
That deadline is tomorrow.
So this is a bad thing?
Up until now, the US had essentially been trying the opposite route out of recession to the UK - they were trying to borrow and spend their way out in the hope that the growth would lead to an ever increasing tax intake for the government and eventually pay for itself with as little pain for the country as possible. It's worked up until now as the US came out of recession first and have reasonable growth.
Compare that to where we are in the UK - essentially bumping along the bottom with a need for ever increasing cuts and tax increases.
Who knows which is the right route, perhaps there isn't one, but the fiscal cliff will put an end to the US's current strategy.
youngsyr said:
Compare that to where we are in the UK - essentially bumping along the bottom with a need for ever increasing cuts and tax increases.
Who knows which is the right route, perhaps there isn't one, but the fiscal cliff will put an end to the US's current strategy.
After WWI this country went along the cuts, cuts, cuts route with no attempt to boost income. It meant that by 1930 we owed more than we did in 1918. A few people managed to ride the problem out but most of these had other, external, sources of income. Come the Wall St crash we were in a dreadful situation, having no fat to feed off. To be fair, a number of countries did the same as the UK. But the route was a dead end. It has been proved as ineffective.Who knows which is the right route, perhaps there isn't one, but the fiscal cliff will put an end to the US's current strategy.
If the USA again goes into recession then it will again drag the world after it. With the problems that the EU has it is in no state to ride out the storm.
Perhpas we don't know what the right route is. All we do know is the wrong one because we've seen it in action before.
youngsyr said:
From the little I know about it, income tax is complicated in the US - you have federal taxes, state taxes and sometimes city taxes too, so the marginal rate is difficult to quantify and will differ from place to place anyway.
Sales tax varies too, but is typically around 5% in my experience of a handful of States.
On the flip side, the UK Government pays for a lot of services for UK citizens that the US government doesn't pay for its own. Healthcare and social benefits being the most obvious.
From what I've seen though, the provision of "public" services by private companies leads to massively inflated prices in the US though - a degree from a top university can cost you over £70k in the US, as opposed to £27k here.
Likewise, healthcare costs are ridiculous - an overnight stay, an X-ray and MRI scan after a friend fell off a horse resulted in a cost of $22k for her insurance company. My OH had a week in a Harley Street hospital and major back surgery for about the same. I've had a consultation and MRI scan privately in the UK for £250.
Couple of inaccuracies, the Federal Govt will pay all sorts of benefits, housing benefits, child benefits and so forth, many benefits are time limited, many aren't. Sales tax varies too, but is typically around 5% in my experience of a handful of States.
On the flip side, the UK Government pays for a lot of services for UK citizens that the US government doesn't pay for its own. Healthcare and social benefits being the most obvious.
From what I've seen though, the provision of "public" services by private companies leads to massively inflated prices in the US though - a degree from a top university can cost you over £70k in the US, as opposed to £27k here.
Likewise, healthcare costs are ridiculous - an overnight stay, an X-ray and MRI scan after a friend fell off a horse resulted in a cost of $22k for her insurance company. My OH had a week in a Harley Street hospital and major back surgery for about the same. I've had a consultation and MRI scan privately in the UK for £250.
We have a tenant who is autistic who gets benefit money from the Federal Govt once a month, and will do for the rest of his life. It's even paid to his brother as the autistic chap would blow the money instantly (that's one part of his problem, unable to handle money).
Same with health care in the US, certain sections of society get free healthcare. In fact, Obamacare which everyone loves actually removes the amount of money for the people who were getting free healthcare! Right now, hospitals here are working overtime to fix OAPs because their budgets for over 75s is much lower next year courtesy of Obamacare.
The person you mention with $22k - let me assure you - the insurance company paid a FRACTION of that amount. On the initial paperwork she got, it'll show the $22k figure, but in reality insurance companies have set prices for all these procedures and all the supplies that were used, and they pay to their price list, not the invoice price the hospital dreams up. So if a bandage is itemised for $10 and it's a $2 item in reality, the hospital is paid $2.
In the event the hospital cuts up rough, the insurance blacklists that hospital and will write to you "If you attend Bapitst Hospital we will not cover you".
The hospital always back down.
JDRoest said:
Couple of inaccuracies, the Federal Govt will pay all sorts of benefits, housing benefits, child benefits and so forth, many benefits are time limited, many aren't.
We have a tenant who is autistic who gets benefit money from the Federal Govt once a month, and will do for the rest of his life. It's even paid to his brother as the autistic chap would blow the money instantly (that's one part of his problem, unable to handle money).
Same with health care in the US, certain sections of society get free healthcare. In fact, Obamacare which everyone loves actually removes the amount of money for the people who were getting free healthcare! Right now, hospitals here are working overtime to fix OAPs because their budgets for over 75s is much lower next year courtesy of Obamacare.
The person you mention with $22k - let me assure you - the insurance company paid a FRACTION of that amount. On the initial paperwork she got, it'll show the $22k figure, but in reality insurance companies have set prices for all these procedures and all the supplies that were used, and they pay to their price list, not the invoice price the hospital dreams up. So if a bandage is itemised for $10 and it's a $2 item in reality, the hospital is paid $2.
In the event the hospital cuts up rough, the insurance blacklists that hospital and will write to you "If you attend Bapitst Hospital we will not cover you".
The hospital always back down.
Nice insight, thanks!We have a tenant who is autistic who gets benefit money from the Federal Govt once a month, and will do for the rest of his life. It's even paid to his brother as the autistic chap would blow the money instantly (that's one part of his problem, unable to handle money).
Same with health care in the US, certain sections of society get free healthcare. In fact, Obamacare which everyone loves actually removes the amount of money for the people who were getting free healthcare! Right now, hospitals here are working overtime to fix OAPs because their budgets for over 75s is much lower next year courtesy of Obamacare.
The person you mention with $22k - let me assure you - the insurance company paid a FRACTION of that amount. On the initial paperwork she got, it'll show the $22k figure, but in reality insurance companies have set prices for all these procedures and all the supplies that were used, and they pay to their price list, not the invoice price the hospital dreams up. So if a bandage is itemised for $10 and it's a $2 item in reality, the hospital is paid $2.
In the event the hospital cuts up rough, the insurance blacklists that hospital and will write to you "If you attend Bapitst Hospital we will not cover you".
The hospital always back down.
I'm just a simple soul ...Derek Smith said:
After WWI this country went along the cuts, cuts, cuts route with no attempt to boost income. It meant that by 1930 we owed more than we did in 1918. A few people managed to ride the problem out but most of these had other, external, sources of income. Come the Wall St crash we were in a dreadful situation, having no fat to feed off. To be fair, a number of countries did the same as the UK. But the route was a dead end. It has been proved as ineffective.
If the USA again goes into recession then it will again drag the world after it. With the problems that the EU has it is in no state to ride out the storm.
Perhpas we don't know what the right route is. All we do know is the wrong one because we've seen it in action before.
It was not the cuts that did for the post war recovery but the return to the gold standard, which proved as successful for us as joining the Euro has been for the Greeks.If the USA again goes into recession then it will again drag the world after it. With the problems that the EU has it is in no state to ride out the storm.
Perhpas we don't know what the right route is. All we do know is the wrong one because we've seen it in action before.
Once we left the gold standard we did rather well, in fact the fall in output in the 'great' depression was less than in the current one.
JagLover said:
Derek Smith said:
After WWI this country went along the cuts, cuts, cuts route with no attempt to boost income. It meant that by 1930 we owed more than we did in 1918. A few people managed to ride the problem out but most of these had other, external, sources of income. Come the Wall St crash we were in a dreadful situation, having no fat to feed off. To be fair, a number of countries did the same as the UK. But the route was a dead end. It has been proved as ineffective.
If the USA again goes into recession then it will again drag the world after it. With the problems that the EU has it is in no state to ride out the storm.
Perhpas we don't know what the right route is. All we do know is the wrong one because we've seen it in action before.
It was not the cuts that did for the post war recovery but the return to the gold standard, which proved as successful for us as joining the Euro has been for the Greeks.If the USA again goes into recession then it will again drag the world after it. With the problems that the EU has it is in no state to ride out the storm.
Perhpas we don't know what the right route is. All we do know is the wrong one because we've seen it in action before.
Once we left the gold standard we did rather well, in fact the fall in output in the 'great' depression was less than in the current one.
JensenA said:
Gene Vincent said:
Hmmm, well lets hope the originator of that poster has no say on the matter.
It's not $38.50 but $385.
Horrible fail.
He's not the only one to get it wrong, it's $3.85It's not $38.50 but $385.
Horrible fail.
Ozzie Osmond said:
Have you been spending Christmas with Gordon Brown?
("Spending" being the operative word.)
Ignorance of the facts dont change reality.("Spending" being the operative word.)
There is no effective spending limit in the Uk or the USA.
The only limit is run away inflation.
Inflation is relatively low by historical standards.
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