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Taxes rise in fiscal cliff compromise
Lawmakers avert 'fiscal cliff,' but hike in payroll taxes takes effect

Your tax rate hasn’t changed, but your income’s still shrinking.

That political paradox applies to 99 percent of American taxpayers spared from steep tax hikes as Congress passed a compromise bill to avert the fiscal cliff this week.

Lawmakers didn’t extend a 2-percent cut in payroll taxes that expired Dec. 31, so the 4.2 percent tax will rise to 6.2 percent. That translates to about $64 less in monthly take-home pay for a worker earning the average American salary of $41,000.

"It was only intended to be a temporary reduction, but families are going to feel it,” U.S. Rep. G.K. Butterfield said. "They’re going to feel that 2 percent.”

President Barack Obama cut the payroll tax in 2010 "to get a little extra money in people’s pockets,” Butterfield said, but the debt-laden federal government needed to raise revenue.

Obama signed the fiscal cliff deal into law Wednesday after the compromise bill passed the Republican-run House and Democratic-controlled Senate. Butterfield, D-Wilson, voted for the bill, as did North Carolina Sens. Richard Burr, a Republican, and Kay Hagan, a Democrat.

The deal allows government to sidestep the one-two punch of higher tax rates for all earners and deep across-the-board spending cuts that were set to take effect Jan. 1. Experts predicted that the drastic cuts combined with tax hikes could plunge the nation back into recession.

Butterfield said the bill isn’t perfect, but he voted aye to preserve the Bush tax cuts for middle-class families. The Bush rates expired Dec. 31, but were reinstated when Obama signed the deal into law.

"I accepted this as a compromise,” Butterfield said. "Had we not done anything, all the tax rates would have increased.”



Burr noted that the law sets permanent rates for the estate tax and alternative-minimum tax, extends unemployment insurance and adds an extra year before Medicaid doctor reimbursements can be cut.

"While the deal we voted on tonight was far from perfect and not as comprehensive as I had hoped, I supported this proposal because it protects 99 percent of Americans from increased taxes,” Burr said in a statement after the Senate approved the bill on Tuesday.

Hagan said she voted for the fiscal cliff deal to protect middle-class taxpayers from annual increases of about $2,200, which they would have had to pay had the Bush tax rates not been restored.

"While I believe it is unacceptable that Washington has once again waited until the eleventh hour to find a solution, and though I would have preferred a comprehensive, balanced solution to avert the fiscal cliff and begin reducing the deficit, I voted for the plan put forth tonight so that we can stop a tax hike on middle-class families in North Carolina,” Hagan said.

Rep. Walter B. Jones Jr., a Farmville Republican who represents North Carolina’s Third Congressional District, voted against the bill along with 150 other House Republicans.

"I’m tired of seeing Congress and the White House rob our children and grandchildren,” Jones said in a statement. "America is nearly broke financially because its political leadership keeps passing bills like this that simply kick the can down the road. Forty dollars in tax increases for every $1 in spending cuts? Adding $4 trillion to the debt? Are you kidding?”

Jones said the compromise was negotiated in closed-door deals outside the public eye.

"The way this deal went down reinforces what America hates about the way Washington is being run,” Jones said. "Backroom deals done in the middle of the night at the zero hour are never good for the American people. This will be no exception. We’re already hearing that millions in special corporate welfare subsidies were included for Hollywood, algae producers, electric motorcycles and many others.” Redistricting took Jones’ territory away from Wilson County. Newly elected Republican George Holding picked up a large portion of Wilson County and now will represent Wilson along with Butterfield.



Both Democrats and Republicans gave some ground. Obama initially wanted to raise taxes for everyone earning $250,000 or more.

The bargain raises $600 billion in new revenue through a tax-rate increase from 35 percent to 39.6 percent for workers earning more than $400,000 a year or couples who make more than $450,000.

Butterfield said that $600 billion is far less than what’s needed to chip away at the federal deficit, and lawmakers will have to make up the difference by slashing services.

What the fiscal cliff bill didn’t do is determine which federal departments and programs will be cut — and by how much — as lawmakers look to trim spending. The bill delayed sequestration, or percentage-based spending cuts set to take effect automatically, for about two months. With another debt-ceiling increase on the horizon, Butterfield fears Republicans will only vote to increase the nation’s debt limit if Democrats agree to steeper cuts.

"We’ve got to raise the debt limit, and it should be unconditional,” Butterfield said. "We owe these obligations. We need to pay our bills.”



The Wilson congressman said his counterparts in the GOP want to starve federal programs that low-income Americans rely on. He believes reducing the deficit calls for a balanced equation.

"For years, Republicans have told us we needed to reduce the deficit, but we shouldn’t count on new revenue,” Butterfield said. "They suggested all along that the way to do that was to cut spending. Every expert in the country has said that in order to reduce the deficit, you’ve got to have a comprehensive approach.”

Butterfield said he anticipates that the clashes over spending and taxes will continue.

"I’m not strongly optimistic,” he said. "I was encouraged by some of the bipartisanship I saw at the eleventh hour on the debt deal, but Democrats and Republicans just have a different vision for America.”

While most politicians agree to spending cuts in principle, Butterfield said the practical effect of those decisions can be devastating.

"There is an element of the Republican conference who believe that we need to drastically reduce spending and reduce the social safety net that vulnerable families depend on,” he said.

The examples of unnecessary spending many small-government critics point out, such as foreign aid and administrative overhead, account for mere fractions of the total federal budget, Butterfield said.

"We spend $3.5 trillion every year as a government,” he said. "I’m not going to say there’s not any waste or abuse in the system, but 99 percent of it goes to wonderful programs that help the American people.”

Butterfield said this week’s fiscal cliff deal was a step in the right direction.

"I was very pleased to see this deal,” he said. "It was a pretty good bargain. It was a pretty good compromise under the circumstances.” | 265-7821
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Ms. Pamaba said...

Some people are born with tons of money in their family. And other people make their money by overcharging the poor for everything. When you see someone with millions of dollars, that's the money they drained out of the pockets of people just trying to survive. And don't talk to me about charity, because charity don't cut it.

Friday, January 11, 2013 at 5:55 PM
@ms pamaba said...

Please explain further. How does the rich get rich by making the poor poorer? Produce facts, figures and a basis for your comments. I'll do one better: Let's take an example in another city... Mr Goodnight from the Triangle who is the richest man in NC (created SAS Corp). He built a statistical software that most all businesses used for a very long time, then went on to create all kinds of applications to streamline business. He made and is making 100's of millions of dollars and is now a global presence. In addition, his charitable contributions dwarf anyone's salary on this forum. Please explain to me how he made the poor poorer by his success? And throw in Bill Gates while you are at it. You can't get much richer than those guys and to be honest both men turned many average "Joe Blows" into millionaires along the way. Also if you simply work at one of our top companies in Wilson and save properly in a 401k there is a strong likelihood that many can be a millionaire by the time they retire. Some people (most) actually do work for what they have and YOU don't deserve it simply because you don't have it. some are born with the gift as well. Some make A's in school, some make F's. It will ALWAYS be like that in life.

Friday, January 11, 2013 at 8:41 AM
To Agree With Ms. Pamba..... said...

So a job is a "right" now according to you? That's right on par with all the other low information citizens and voters.

Thursday, January 10, 2013 at 6:36 PM
Ms. Pamaba said...

The rich can't stay rich unless they keep everyone else poor. That's why they do it.

Thursday, January 10, 2013 at 5:23 PM
@fooled said...

Ok, so let them deal with that. There is more new wealth in Wilson than old anyway. The "old money" thing is actually kinda funny....except for a very small few, most "old money" has been inherited so many times and dispersed that it really is not even an issue like some think. I know a few of those kids and now adults; they pretty much wasted it away.

Thursday, January 10, 2013 at 4:13 PM
Don't be fooled. said...

A lot of old money in Wilson was "ill gotten gains."

Thursday, January 10, 2013 at 12:49 PM @ms pamaba & agree person said...

Wealth is not wrong. Wealth is part of being in a capitalistic society and living the American Dream. The majority of US Presidents have been wealthy and successful. You chose your path, not the wealthy. You seriously didn't think when you chose to be a teacher you would end up a millionaire??? Trust me, the wealthy are not trying to push people into poverty; they don't have that much power. Remember if someone has 10 million in the bank, someone else has 100 million in the bank. "Rich" people in Wilson are merely small fish in a very big ocean. They did nothing wrong by being successful and don't deserve to be taxed at any higher rate than you; you are being unfair. All the hoopla about rich folks only being taxes a small percentage is on investments, not income. I have investments and I pay the same rate as the so called "rich.". I think its a travesty when people take down those who succeed simply because they didn't. In China their yearly ave salary is $3,000. Think you need to define "wealth".

Thursday, January 10, 2013 at 8:37 AM @ Agree with Ms. Pamaba said...

With your retirement and 60,000 home that you own to some you would be considered wealthy.Point it is all about relevance.

Thursday, January 10, 2013 at 7:52 AM Agree with Ms. Pamaba said...

Yes, I talked with two wealthy people in Wilson prior to the Nov. election. Both complained about too much government control in their small businesses. And both live in houses that are valued at a million dollars or more. Living comfortably in a $60,000 condo as a retired teacher, I really couldn't find any sympathy for them. I's the wealthy who push the working class back into poverty (and both of these folks pay their employees minimum wage and make sure they work less than 40 hours a week so they don't have to offer benefits). Sorry, but the wealthy need to be taxed more.

Thursday, January 10, 2013 at 11:16 PM Ms. Pamaba said...

It's the wealthy who push the working class back into poverty every chance they get.

Wednesday, January 09, 2013 at 5:42 PM said...

It is still a tax he lied.

Wednesday, January 09, 2013 at 3:27 PM and God said...

Every Senator and Representative should have to withdraw a pet project (pork) at a mininum of $10 billion dollars. Then there would be no over spending by the government. They could balance the budget.

Tuesday, January 08, 2013 at 12:40 PM @ms. pamaba said...

I think what is at play here is how should "government" be involved in social responsibility. Anyone can make a statement like you did, and that helps us how? Abraham Lincoln was a Republican and made some rather historical social issues public and into law. If you are speaking about welfare, even President Clinton said "Each state must meet certain criteria to ensure recipients are being encouraged to work themselves out of Welfare." The goal is not government assistance and its not a means to an end. How to solve that issue has been ongoing since the 1930's on both sides of the aisle.

Tuesday, January 08, 2013 at 8:40 AM @the truth said...

All the tax "holiday" by Bush was set to expire. I think we should have let it happen. Taxes are the only way to pay back all the money borrowed. Obama spent in 4 years more than Bush in 8 and Bush was financing two wars. Yet we continue to spend like we have unlimited funds. Ever wonder why the economy is taking so long to come back?

Tuesday, January 08, 2013 at 8:25 AM Ms. Pamaba said...

Republicans have never heard of "social responsibility."

Monday, January 07, 2013 at 8:26 PM The Truth said...

President Obama did not lie. The rise in payroll taxes is an expiration of a "tax holiday."
Don't act so spoiled.

Monday, January 07, 2013 at 7:23 PM Mike said...

Butterfield is dilusional. Unconditional raises of the debt ceiling. I wonder if he runs his household budget in this manner? Doubt it.

Monday, January 07, 2013 at 9:43 AM really? said...

Butterfield said "“We spend $3.5 trillion every year as a government, I’m not going to say there’s not any waste or abuse in the system, but 99 percent of it goes to wonderful programs that help the American people.”
By that logic there is only $35 Billion dollars he'd be willing to cut out of a budget deficit of over a trillion dollars? Yet he says we should undconditionally raise the debt ceiling. No wonder this country is going broke.

Monday, January 07, 2013 at 8:35 AM said...

Obama said during ALL his campaigns and Presidency he would not raise taxes on people making less than 150,00 per year or some figure like that WELL GUESS WHAT HE DID so like all before him HE LIED!!!!!! He is no different than anyone else. Say and do anything to get the job and do whatever once in it.

Monday, January 07, 2013 at 7:54 AM ??? said...

To Gov't assistance costs...because US state employees work our butts off everyday and pay taxes and will lose our jobs if we test positive for drugs. Also if a state employee smokes or is overweight they now have insurance that doesn't cover as much or pay as much. At least we PAY taxes!!!!!!!!

Monday, January 07, 2013 at 9:25 PM To Gov't.... said...

The argument had nothing to do with the relative health of the food bought, but rather the cost of the food that can be purchased. Most who work and pay taxes "treat" themselves to that quality and cost of food and it is not a staple, and shouldn't be when it is the tax payers doing the treating. What started off as a necessary and genuine program and it has since turned out into a system of abuse and dependency. At some point the head has to be cut off of the snake and rein it in.

Sunday, January 06, 2013 at 7:35 PM Gov't assistance costs said...

The state government gives its employees health insurance. Our tax dollars pay for it. I suppose "idea..said" believes all state employees should buy only healthy foods (no Doritos), as our tax dollars are going to pay the medical bills of unhealthy state employees. Oh, and if they made the choice to smoke and end up with lung cancer, let those stupid gov't employees pay their own bills. After all, they're spent our tax money foolishly and they should learn a lesson. Why restrict harsh punishment to those who receive government assistance through food stamps?

Sunday, January 06, 2013 at 12:34 AM Idea.... said...

A great way to do this is to give people assistance and require them to "pay tax" on that money each year. It teaches responsibility. So if the max is $535 per week, there would be a percentage of that check that is required to be "paid back as taxes" each year. If they did not do this like every other tax paying American then their assistance is denied the following year. They would not be on assistance for unemployment for 99+ weeks. This would apply to all aid. Also restrict how food stamps may be spent. It is to help the person out with the necessities to survive. It is not to give them free rein to buy ribeye steaks, etc. Beans, rice, chicken, pork potatoes, soup, canned vegetables, etc. And finally mandatory DRUG TESTS. No one should be opposed to this but for some reason the left is very outspoken against this. Answer me why??..If your government can regulate guns and ammo that law abiding citizens can own and use, then they should be able to regulate recipients of food stamps as to what they can buy. Things that are detrimental to their health, such as a $4 bag of doritos or $10/lb ribeye steaks. I wish people would wake up and get in touch with your state legislator(s) and request they save NC while they have the chance by regulating state benefits administration to reflect responsibility and removing people from the state's dole. It's sad but we are truly lost as a nation because we are more than 50% reliant on the government to provide for us and our necessities. Look at Europe, with the exception of Germany.

Saturday, January 05, 2013 at 12:12 PM reader said...

well said!!!

Saturday, January 05, 2013 at 11:37 AM ??? said...

“I’m not going to say there’s not any waste or abuse in the system, but 99 percent of it goes to wonderful programs that help the American people.”
Really Mr. Butterfield...go to DSS or to the courthouse and you will see people that ABUSE our system EVERYDAY. Yes there are programs that are INTENDED to help the American people that have falling on hard times, but those programs in no way were meant for people who CHOOSE to live the way they live. Start holding people ACCOUNTABLE for the CHOICES they make and let those programs go back being used the way they were originally intended. Government handouts should NOT be a career choice and sadly today it is!!!!!

Saturday, January 05, 2013 at 8:10 AM
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