The idea of the financial cliff may have been first introduced by Federal Reserve Chairman Ben Bernanke. Congress and President Obama need to act with legislative changes to allow America to transition from automatic tax increases, but will they?
There is no cliff. But, there is a correction to excessive spending and to the national debt. Romans 13:8 states, we should “Owe nothing to anyone.”
If we do nothing we will fall off the fiscal cliff when the Bush era tax cuts of 2001 and 2003 expire Dec. 31, 2012. Social Security Payroll Tax rates will increase. The long-term capital gains tax rate will increase. The current estate and gift tax exemption will be changed and the tax on estates will almost double.
Both political parties have not balanced spending and taxes. Now we must follow Romans 13:7 and “Give to everyone what you owe them: Pay your taxes and government fees.”
• What will be the effect on workers?
Workers will see their take-home pay reduced beginning January 2013. If your family income is $50,000 per year your cut in take-home pay will be approximately $20 each week for Social Security and taxes will increase on every person another $25 per week. Even though it is a bitter pill, your instruction is to “Pay your taxes and government fees” and that will deduct approximately $45 each week from take-home pay.
How will this affect the job market?
• Fewer jobs will be available until there is a safer economy. The President has tried to create jobs by the government. Know this! Anytime state and federal government increases job availability taxes must go up to pay for it. The Congressional Budget Office believes that up to 3.4 million jobs would be lost after 2013 due to a slowing economy with layoffs stemming from cuts in the defense budget in 2012. With other cuts the unemployment rate will increase up to 9.1 percent or more.
The most insidious tax placed on every citizen is the inflation tax, causing increased spending from your pocket while buying less. No one is excluded such as welfare, retirees and citizens with fixed income. You have seen increased grocery cost, housing cost, automobile cost and every American will pay debt interest and have less income due to inflation tax.
World history teachers that great wealth was obtained by Babylon/Iraq when they took captives and ruled the world in 605 BC. As they started to spend more of their wealth than they had Persia/Iran defeated them bringing servitude. Alexander the Great stormed across Persia/Iran until he died. Four of his generals took over world rule (Daniel 7:6) and the last great ruler, Rome, ruled with power until they went bankrupt spending too much, by taxing the rich, by increasing entitlements, giving out “dole” welfare funds and buying its military from other countries. Sounds like the 2013 America.
It looks like every American worker will be paying for a new car next year. However, there will not be a new car in your driveway. As a nation the U.S. owes a greater debt than she earns in Gross National Product, which means the debt cannot be paid. With no action from congress to improve by increasing taxes and by cutting spending the likely scenario is devaluation of the dollar. How many times must the dollar be devalued before the fulfillment of Revelation 6:6 when it will take a days wages to buy a loaf of bread.
If we choose to repair this mess America must follow the Bible. 1 Peter 2:13 directs that “For the Lord's sake, respect all human authority — whether the king as head of state.” It was Jesus who said in Matthew 22:21 "give to Caesar what belongs to Caesar, and give to God what belongs to God."
N. Brad Carter is a bible class teacher on WMER (1390 AM) Radio. Email him at firstname.lastname@example.org.