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What Will the Fiscal Cliff Cost You?

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    WSJ senior economic writer Steve Moore sounds off on Congress' inability to compromise.

  • Duration 4:34
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This transcript is automatically generated

But yeah.

President Obama and lawmakers are set to get right to work upon president's return from Asia about with so little time left what exactly happens to you in your cash.

If would be tumble over that fiscal -- the Tax Policy Center took a look at how different incomes would be -- so.

If your family earns around 64000 dollars -- -- well you'll see a tax increase of three point 8% that's about 2000 dollars.

If you make around 1101000.

Dollars your family would pay an additional 3500.

Dollars after tax increase of four point 2%.

And if you -- an annual income of around 500000.

Dollars per year.

You would see your taxes jumped five point 2% or nearly 151000.

Dollars.

Here waiting Steve Moore senior economics writer to Wall Street Journal -- great to see your -- piece in today's general mind this that.

What the country needs this is your thesis and a lot of people it said it but it's worth reminding us right.

We need more rich people that the president quote loves to excoriating not more taxes from those who already exist.

Well that's exactly right in -- a look at the new IRS statistics that just came out.

A couple weeks ago what they show is one of the reasons that tax revenues are now down as low as they've been any time in about fifty years.

Is that the number of about rich people people who are filing returns with a million dollars -- -- cover more.

Has fallen almost by a third in just the last 45 year or so.

You know if you want more money you gotta get more rich people and we were producing less fewer and fewer millionaires all the time and it's a big reason why we have.

This enormous stops and I've not the problem with raising these rates by the way as you know you're trying to talk and more more Brothers from a Paris right shrinking number of -- happens -- box.

That's apropos given the time -- -- here important data sheet to keep in mind that tax revenues under bush.

Decline also need and I believe this goes on to what -- you're describing here because you can't think tank to 20072008.

But that's -- bad -- -- go back before that though I mean there really what's amazing is you go back to 2003.

When those investment tax cuts started then you look at 0304 about 0607.

We had a record.

I gusher of tax revenues in fact that we we increase tax revenues over that four year period by 780.

Billion dollars you can look it up and Barack Obama is on budget.

At Dulles REL -- I think the point here is if you want more tax revenues you -- don't get a lot more -- it doesn't matter how much Barack Obama and the congress raise tax rates this year if we're stuck -- weather map for two to 2% growth.

You're just never gonna see that -- anywhere near the kind of revenues we need to balance the budget.

And can -- Let's say something about something that rich just said in his report or not I.

I'm so frustrated with is that what order to create another surplus started yet about the profit -- there.

Vs other why won't they ever just cut spending right now and -- Just say this you know I.

I don't get an appointment let's just do this let's just do the Cox.

Yeah -- because we've got we're spending a trillion dollars more than we're taking on what has every corporation doing what is every household doing they're cutting their expanded.

Actually getting that's your point of well you know we need growth to create more millionaires and billionaires and that's the problem and that's obviously the big fear of tumbling off the clinics.

-- -- about ago although let me correct you right -- is this is when I pet peeves.

If you cut government spending that is good for the economy it's not bad for the economy I am so tired of this I want.

I he has embedded inside of the -- out of Ali Al Aqsa is at Minneapolis Jane standout right OK you got -- exactly right and.

But telling the reason I get frustrated just get everybody else gets this wrong I don't when you turn on the other networks what they're talking about -- oh my gosh we can't -- -- -- -- gonna hurt the economy.

You know what that's the same kind of.

Economic logic they gave us this 830 billion dollar stimulus bill which was supposed to get down upon -- it got -- -- -- for.

Thanksgiving of course I was all day out of you know let's talk particulars you know Boehner is talking about revenue he's -- -- on the table -- in your -- this morning you reference some.

Middle ground possibilities like increasing the -- fifty threshold even 500000 dollars you're even million dollars -- you know what -- likelihood of that actually -- I'm not by the -- I'm not endorsing the -- I'm just gonna be good about just talking about options that people are talking about another and I think that's you know very very possible middle ground position.

Another possibility to think about is maybe suffering -- separating out the tax rate that is imposed gotten.

Business income vs salary income saw you know somebody like got the -- James who -- -- money and salary they would.

Pay -- higher rate but people who actually have business income they pay a lower rate.

Good -- even more in love having you like -- so fired up come back basically if but I think they keep him.

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