The BBC has a Sunday show which airs its viewers’ criticisms of the British broadcaster’s programmes from the previous seven days.
It seems that the minute-by-minute countdown to another supposed ‘end of the world’ raised just as much ire with viewers as the second-by second countdown to the US’ suicide leap over the ‘fiscal cliff’.
Much like the constant drip drip of a leaky tap the constant commentary on ‘will they or won’t they’ which seems to best characterise financial news reporting on both sides of the ‘pond’ was grating.
I wonder though if anyone really believed that we were being subjected to anything more than manufactured melodrama of a kind that in the world of the soap-opera rightly provides viewers with their nightly fix of ‘whodunit’.
Perhaps it was a bit much to expect that the newly and now twice-on-the-trot defeated Republicans would place giving a triumphant Obama an uninterrupted Hawaiian respite pride of place on their Christmas ‘to do’ list.
After all commiserations and in some case felicitations needed to be proffered and received by the members of the Grand Ole Party.
Those realities aside however it could hardly have been the case that they would have allowed the US economy to go into free fall either.
So I doubt if anyone was in the least surprised that during the last hour of 2012 an agreement would have been made ready for the President and his ‘autopen’ that would settle the matter about the status of the tax measures introduced under the Bush administration and due to expire on the stroke of midnight.
Predictably perhaps the story so far about the 2013 American Taxpayer Relief Act is that it a forestalls conclusive determination about the balance to be struck between revenue raising and reducing expenditure.
Tax incentives to Puerto Rican rum, railways, the film industry and NASCAR remain which means that the car-racing giant can expect to maintain its estimated £43m in legitimate tax breaks because of the extension of the 2004 law.
The semi-rich, those who make between $250,000 and $400,000 a year, can now afford to celebrate right into Chinese New Year because instead of the expected increases to their tax rates the new Act has instead gifted this group with a permanent extension of the Bush tax cuts.
Milk lovers who expected an overnight increase in the price of milk also found that an expected reversion to an archaic price formula too was averted—at least for the next nine months.
As if to underscore the point in his weekly address to the nation a week after signing the 2013 Act, President Obama called on the new Congress to reduce the United States fiscal deficit by allying future spending cuts with reforms to raise more taxes from corporations and the wealthiest individuals.
He also reminded his audience that, during last year’s presidential election campaign, he had promised that if he was “fortunate enough to be re-elected, (he would) work to change a tax code that too often benefited the wealthy at the expense of the middle class.”
In his response, the House of Representatives Ways and Means Committee Chairman Dave Camp (R – Michigan) stressed that “this government spends too much and wastes too much … That means cutting wasteful spending … (and making) sure Washington is accountable for every tax dollar it spends.”
He also added that, under the Obama Administration, “the spending problem is getting worse, not better … (and) that is the current financial reality facing America. As we turn our attention toward future discussions on the debt limit and the budget, we must identify responsible ways to tackle Washington’s wasteful spending.”
This opening salvo and the Republican retort suggests that the real drama is not going to be about what happens when the extensions in the 2013 Act expire setting the stage for another countdown to a possible US free fall but rather tax reform.
Not the kind of tax reform however that is concerned about making the Tax Code less encumbered and a means of lowering tax rates but rather closing loop-holes and broadening the tax base.
Let the drama begin…