I am surprised there are no taxes increases being discussed.... I can't believe the Republicans could pull that off - especially since one of Obama's central pledges in the 2008 election was increasing taxes on families making more than $250,000.
Of course, every year there are tax increases on most US taxpayers just due to inflation and yet the lawmakers seems to ignore that problem (or simply are enjoying the "flexibility" of increased spending potential).
The taxability of social security benefits comes to mind. In 1983, social security benefits became taxable for single filers earning (a modified adjusted gross income) more than $25,000 ($32,000 for married filers). In 1993, the taxability of higher income taxpayers increased even more.
Has this amount been indexed to inflation?
Nope.
So as wages, interest, dividends and of course, social security benefits, have increased just due to inflation every year, what do you expect would have happened?
That's right - the portion of social security that is "taxable" increases each year. It will happen again certainly in the next couple of years (2012 or 2013) despite the "no new taxes" pledge of 240 Republicans.
Just checked the IRS Statistics of Income to give you an example. In 1996, $53 billion of social security benefits were taxable. In 2008, $151 billion (a 300% increase) was taxable. That extra $100 billion in taxable income provides the US Treasury with an extra $20 billion a year or so.
The problem of ignoring certain threshold adjustments because of inflation for decades is a common problem with Washington. The rental real estate loss limitation for taxpayers with income greater than $100,000 was set in 1986, the capital loss limit of $3000 was created in 1977.
So it looks like no tax increases on this debt deal...well... maybe a few tax increases...
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