The fiscal cliff has been averted...for now! Late on New Year's night the House of Representatives passed the American Taxpayer Relief Act of 2012
So what does this all mean for you?
The bill is a compromise with republican and democratic lawmakers to help ease the burden of many different policies that were scheduled to go into effect at one time such as federal tax increases and spending cuts. While most of the bill applies to those who make more than 400 thousand dollars a year there are still some changes that impact the average person.
For the most part, the changes include higher taxes on the wealthiest Americans, but the average working person will also notice an impact on their paycheck. The social security tax is going from 4.2 percent back up to 6.2 percent. It is not a new tax, just a re-instated one.
The bill also includes some tax credit extensions for wind energy and bio fuel businesses. The current farm bill is also attached to the deal extending the bill for one more year. While it gives some stability to agriculture, it is important that the "new congress" address this bill in a timely fashion going forward.
Both Democratic Senator Tom Harkin and Republican Senator Chuck Grassley voted "no"on the fiscal cliff bill. Harkin says it helps the wealthy at the expense of the middle class and Grassley says it does not focus on the spending problem the nation has. Senator Grassley said the bill only addresses about 10 percent of the annual deficit. He would like to see a spending freeze this year to prevent further debt.
Stay tuned...the next "fight" is the debt ceiling!
