Congressional negotiators, trying to avert a fiscal crisis in January, are examining ideas that would allow effective tax rates to rise for the wealthy without technically raising the top tax rate of 35 percent. They hope the proposals will advance negotiations by allowing both parties to claim they stood their ground.

One possible change would tax the entire salary earned by those making more than a certain level ”” $400,000 or so ”” at the top rate of 35 percent rather than allowing them to pay lower rates before they reach the target, as is the standard formula. That plan would allow Republicans to say they did not back down in their opposition to raising marginal tax rates and Democrats to say they prevailed by increasing effective tax rates on the rich. At the same time, it would provide an initial effort to reduce the deficit, which the negotiators call a down payment, as Congressional tax-writing committees hash out a broad overhaul of the tax code.

That idea could be combined with the reinstatement of tax code provisions that once prevented the rich from taking personal exemptions or itemizing deductions. Those rules were eliminated by the tax cut of 2001. Reinstating them would tack an additional one to two percentage points onto the effective tax rates of high-income households without raising the 35 percent rate, but which households would be affected has not been decided. In all, tax experts say, families in the top tax bracket would find their effective tax rate jump to 41 percent, even though the top statutory rate would remain 35 percent.

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Most of the increases would result from the expiration of Bush-era tax cuts, which would cause marginal rates to rise. Simultaneously, several temporary tax breaks pushed by President Barack Obamaafter the financial crisis also would end.

And most households””121 million in all””would be hit by an increase in the payroll tax that employees pay to 6.2% from 4.2%.

Also expiring at year-end is a provision to reduce the so-called marriage penalty, a set of tax provisions that require many couples to pay higher taxes when they file jointly. And millions more families’ earnings this year would be subject to the alternative minimum tax. The AMT was originally intended to prevent the very wealthy from avoiding taxes but would apply to middle-class households if policy makers don’t renew a provision that expired last year.

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…the biggest loopholes in the U.S. Tax Code ”” generally referred to as tax expenditures ”” aren’t just the tricks of the trade for millionaires with offshore bank accounts. For the vast majority of Americans, they’re just how things work: You don’t pay taxes on your health insurance or Medicare benefits; you contribute tax-free to your 401(k); and your mortgage interest pushes down your tax bill each year.

And even if you dump the biggest of the set, these tax perks don’t even come close to closing the deficit. At best, the top 10 would pull in an extra $834 billion a year, according to Joint Committee on Taxation figures. Considering the hole lawmakers are trying to fill is several trillion dollars large, it’s clear they wouldn’t even come close.

Here are the 10 biggest tax loopholes ”” and the reasons why most of them will survive the fiscal cliff….

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U.S. companies are scaling back investment plans at the fastest pace since the recession, signaling more trouble for the economic recovery.

Half of the nation’s 40 biggest publicly traded corporate spenders have announced plans to curtail capital expenditures this year or next, according to a review by The Wall Street Journal of securities filings and conference calls.

Nationwide, business investment in equipment and software””a measure of economic vitality in the corporate sector””stalled in the third quarter for the first time since early 2009. Corporate investment in new buildings has declined.

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“Mitt Romney has opened doors. He has made Mormonism much more respectable,” says Charles Dunn, a professor at Regent University, and author of numerous books on politics and religion.

“He came out of this campaign as an honourable person, and that bodes well. He is the best missionary Mormons could have.”

At the headquarters of the Church of Jesus Christ of Latter-day Saints (the official name of the Mormon Church) in Salt Lake City, Utah, there appears to be a similar mood of optimism. Although they have not given figures on whether membership numbers are up, enquiries certainly are. Mormons make up about 2% of Americans, but numbers are rising steadily.

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One of the signs that an object is functioning as an idol is that fear becomes one of the chief characteristics of life. When we center our lives on the idol, we become dependent on it. If our counterfeit god is threatened in any way, our response is complete panic. We do not say, ”˜What a shame, how difficult,’ but rather ”˜This is the end! There’s no hope!’

This may be a reason why so many people now respond to U.S. political trends in such an extreme way. When either party wins an election, a certain percentage of the losing side talks openly about leaving the country. They become agitated and fearful for the future. They have put the kind of hope in their political leaders and policies that once was reserved for God and the work of the gospel. When their political leaders are out of power, they experience a death. They believe that if their policies and people are not in power, everything will fall apart. They refuse to admit how much agreement they actually have with the other party, and instead focus on the points of disagreement. The points of contention overshadow everything else, and a poisonous environment is created.

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Should lawmakers not reach agreement prior to the end of the year, the US budget deficit for 2013 would be cut almost in half, to $560 billion.

Which doesn’t sound like a bad thing. After all, the US is staggering under a monumental pile of debt and could potentially begin to face the kinds of difficulties that have plunged several euro-zone countries into crisis. It is a viewpoint shared by the ratings agencies — a year ago, Standard & Poor’s withdrew America’s top rating, justifying the measure by pointing to the unending battle over the debt ceiling. The agency noted that “the political brinksmanship of recent months highlights what we see as America’s governance and policymaking becoming less stable, less effective, and less predictable than what we previously believed.”

From afar, it is difficult to argue; the ongoing battle between Democrats and Republicans in the face of a horrendously imbalanced budget looks catastrophically absurd. As their country heads toward the edge of the abyss, lawmakers preferred to debate whether or not French fries and pizza should be considered vegetables.

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President Obama vote totals shrank in all 12 of our battleground states, as they did throughout the country. What’s particularly striking, however, is that in none of the battlegrounds did he win a majority of either mainline Protestants or Catholics, with the exception of Nevada, where the heavily Latino Catholic electorate supported him by five percentage points. So in winning ten out of the dozen, the president had to depend on non-Christians.

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We’re more affluent than we were in the 1950s (if you don’t think so, try doing without your air conditioning, microwaves, smartphones, and Internet connections). And we have used this affluence to seal ourselves off in the America of our choosing while trying to ignore the other America.

We tend to choose the America that is culturally congenial. Most people in the San Francisco Bay area wouldn’t consider living in the Dallas”“Fort Worth metroplex, even for much better money. Most metroplexers would never relocate to the Bay Area….

One America tends to be traditionally religious, personally charitable, appreciative of entrepreneurs, and suspicious of government. The other tends to be secular or only mildly religious, less charitable, skeptical of business, and supportive of government as an instrument to advance liberal causes.

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We are interested in who you are and where you live, your thoughts on the outcome and the reason, and particularly your information about your own specific region and the elections and referendum questions there. Once again, please, real names STRONGLY preferred if at all possible–KSH.

I always felt this election was between a weak incumbent and a weak campaign, and that view has not changed. I knew it was going to be very close at the popular level, and said to several friends that the only way Mitt Romney stood a chance electorally was to win Virginia, Ohio and Colorado. He lost all three.

So why did we have this outcome? There are a lot of reasons, but in my view the main ones are these:

The incumbency is a powerful thing–always has been, but all the more so today when the (office and position of the) Presidency has gained more power (too much power?) than before.

Let us remember that governing is MUCH harder than campaigning, and the two are not the same. And let us continue to pray that God has mercy on America–KSH.

Update: I found it interesting to go back and reread what I wrote about the 2008 campaign–Why What Happened Happened in Election 2008.

…historically, voters have given a second term to incumbent presidents who preside over even modest economic growth during an election year.

That pattern appears to have held for Obama. If the economy is not exactly roaring ahead, it improved steadily over the course of the year.

“It was never going to be a landslide,” said John Sides, a political science professor at George Washington University. “But it was always his race to lose.”

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In this sense, just as Reagan Republicanism dominated the 1980s even though the Democrats controlled the House, our own era now clearly belongs to the Obama Democrats even though John Boehner is still speaker of the House.

That era will not last forever; it may not even last more than another four years. The current Democratic majority has its share of internal contradictions, and as it expands demographically it will become vulnerable to attack on many fronts. Parties are more adaptable than they seem in their moments of defeat, and there will come a day when a Republican presidential candidate will succeed where Mitt Romney just failed.

But getting there requires that conservatives face reality: The age of Reagan is officially over, and the Obama majority is the only majority we have.

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Barack Obama won a second term but no mandate. Thanks in part to his own small-bore and brutish campaign, victory guarantees the president nothing more than the headache of building consensus in a gridlocked capital on behalf of a polarized public.

If the president begins his second term under any delusion that voters rubber-stamped his agenda on Tuesday night, he is doomed to fail.

Mandates are rarely won on election night. They are earned after Inauguration Day by leaders who spend their political capital wisely, taking advantage of events without overreaching. Obama is capable””as evidenced by his first-term success with health care reform. But mandate-building requires humility, a trait not easily associated with him.

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The nation, as you know, is at a critical point. At a time like this, we can’t risk partisan bickering and political posturing. Our leaders have to reach across the aisle to do the people’s work.

And we citizens also have to rise to the occasion. We look to our teachers and professors, we count on you not just to teach, but to inspire our children with a passion for learning and discovery.

We look to our pastors and priests and rabbis and counselors of all kinds to testify of the enduring principles upon which our society is built: honesty, charity, integrity and family.

We look to our parents, for in the final analysis everything depends on the success of our homes.

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Tonight, in this election, you, the American people, reminded us that while our road has been hard, while our journey has been long, we have picked ourselves up, we have fought our way back, and we know in our hearts that for the United States of America the best is yet to come.

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Barack Hussein Obama was re-elected president of the United States on Tuesday, overcoming powerful economic headwinds, a lock-step resistance to his agenda by Republicans in Congress and an unprecedented torrent of advertising as a divided nation voted to give him more time.

In defeating Mitt Romney, the president carried Colorado, Iowa, Ohio, New Hampshire, Virginia and Wisconsin, a near sweep of the battleground states, and was holding a narrow advantage in Florida. The path to victory for Mr. Romney narrowed as the night wore along, with Mr. Obama winning at least 303 electoral votes.

A cheer of jubilation sounded at the Obama campaign headquarters in Chicago when the television networks began projecting him as the winner at 11:20 p.m., even as the ballots were still being counted in many states where voters had waited in line well into the night. The victory was far narrower than his historic election four years ago, but it was no less dramatic.

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Preliminary results of an exit poll conducted for The Associated Press show that the presidential election hinges once again on the economy.

The survey of voters as they leave polling places Tuesday shows 6 in 10 voters say the economy is the top issue facing the nation, with unemployment and rising prices hitting voters hard.

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Check it out. One of my favorite analysts is Greg Valliere of the Potomac Research Group. You can watch his interview on Bloomberg TV today there. I believe his map will look like this; he has the President winning with 281 electoral votes (he and I, incidentally, differ on only one state, Ohio [and that gives me a different overall outcome]). Note also that he thinks there is a 40% chance that we will not know who won by tomorrrow morning.

There is a lot of gobbledook floating around on this election so it is important to cut to the bottom line:

(3) This is a weird year. I absolutely, positively am skeptical of many polls and much of the analysis–KSH.

Share your voting experience – how long did you wait? Any interesting observations or conversations? Where and with whom are you watching election returns tonight?
Whatever thoughts you chose to share. Please if at all possible real names and locations highly preferred. The more specific you can be the better–remember you are writing comments for people in other locales that include other countries, etc.

Americans turned out to vote Tuesday morning, facing long lines, strict new identification requirements and in some areas, polling stations without power.

Election observers said they had seen a scattering of problems this morning, including hours-long lines in South Florida, malfunctioning voting machines in key Ohio precincts and Pennsylvania poll workers asking voters to show identification when they didn’t need to.

“It’s already started, and it is busy,” said Barbara Arnwine, the executive director of the Lawyers’ Committee for Civil Rights Under Law, which monitors voting problems. “Voters are doing their part by being persistent and voting.”

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While health care and the economy are top issues for all voters, religious views do affect how voters rank other issues. Among the five belief-based faith segments analyzed in the study””evangelicals, non-evangelical born again adults, notional Christians, adults of other faiths, and religious skeptics (i.e., atheists and agnostics)””evangelicals were notably distinct from other groups in regard to what many considered their “signature issues.”

Among all likely voters, abortion ranked last on the list of influential issues. Among evangelicals, though, it ranked as the third most influential issue. Only taxes and health care were deemed more important in their candidate selection. Similarly, gay marriage was ranked tenth among likely voters, but was fifth on the list among evangelicals who are likely to cast a ballot in November.

Surprisingly, educational policies were deemed the sixth most significant issue to all likely voters but ranked just tenth among evangelicals. Past studies have indicated that evangelicals are generally much less supportive of government involvement in the schooling of their children.

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[KIM] LAWTON: Prior to 2008, scholars talked about a God-gap in American politics: the more often people attended religious services, the more likely they were to vote Republican, the exception being African Americans, who are overwhelmingly Democratic. Many experts believe that trend will continue in this election cycle. Melissa Deckman is professor of political science, at Washington College in Chestertown, Maryland.

PROF. MELISSA DECKMAN (Washington College): If you think about the God-gap, so-called God-gap, it’s still alive and well this year in American politics, and it’s bigger than things like the gender gap, although you often hear more in the media about women’s voting and men’s voting, so I think religion continues to play a big role in American presidential elections.

LAWTON: The Republicans are hoping for a big turnout from evangelicals, who make up about one-quarter of GOP voters. In the early days of the campaign, there were questions about whether theological differences would keep evangelicals from supporting a Mormon candidate. Governor Mitt Romney’s campaign tried to woo them on the basis of shared values.

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Almighty God, to whom we must account for all our powers and privileges: Guide the people of the United States (or of this community) in the election of officials and representatives; that, by faithful administration and wise laws, the rights of all may be protected and our nation be enabled to fulfill your purposes; through Jesus Christ our Lord. Amen.

–Book of Common Prayer

Heavenly Father we ask that you will have mercy on America today and bless us in spite of ourselves. We ask that you will give wisdom to all who go to the polls to cast their votes. Help us as we make difficult decisions on a variety of issues and as we seek to elect men and women who will hunger for righteousness and seek the common good to positions of authority in our towns and cities, in our states and in our nation. We pray against any voter fraud or any corruption of proper voter access and ask that justice be done in each and every election, whatever the locale. We also pray for peace and grace with one another as the results are received and digested, through Jesus Christ our Lord, who with you and the Holy Spirit lives and reigns in glory everlasting, Amen–KSH.

In a journey through the nation’s major swing states, from the neon of Nevada, through the grain elevator towns of Iowa, to the soccer-van suburbs of Virginia, almost everyone I encountered wants politicians in the nation’s capital to put their differences aside and get something done. They don’t expect it to be easy. And they don’t expect law-makers to abandon their principles entirely.

What they do want is an effort to make progress on the most pressing issues of the day, from jobs to immigration to debt, without using politics as a baton to bludgeon opponents. They yearn for lawmakers to act with the same kind of urgency and civility that they do when solving problems around their kitchen tables and in their school board conference rooms….

…as Sam Castrogiovanni, a mechanic in Las Vegas for 20 years who has the grease under his fingernails to prove it, notes: “I could care less if some politician has a ‘D’ or an ‘R’ behind their name. I just want some results.”

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Finance chiefs of the world’s 20 leading economies are ringing alarm bells over the U.S. fiscal cliff and Europe’s debt woes at a meeting in Mexico this weekend as they look to push back deficit reduction targets to help boost growth.

Unless a fractious U.S. Congress can reach a deal, about $600 billion in government spending cuts and higher taxes are set to kick in on January 1, threatening to push the American economy back into recession and hit world growth.

“The Americans themselves acknowledge that this is a problem,” a G20 official said on condition of anonymity. “The U.S. administration says it doesn’t want to fall off the fiscal cliff, but right now it can’t tell us how exactly it will address it because that issue is on ice ahead of the election.”

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I found a prayer guide I liked and used it in the Prayers of the People this morning and got good feedback. Here is the section on praying for the voters:

The Voters

The Great American Experiment in representative government for more than 200 years has depended upon voter involvement. From the very beginning of our nation there has been debate on who should be allowed the privilege of casting a vote to select our governmental leaders. The weight of history has increasingly opened the ballot box to more and more individuals.

This requires an educated electorate who will examine the issues and the candidates and vote in a way that is best for the nation, not just their own well-being. Much prayer is needed for this critical process.

Pray today for voters in the United States, that:

Wisdom will be sought from God (James 1:5).
Self-interest will be laid aside for the common good.
Discernment between truth and falsehood will be clear.

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