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Thursday, January 03, 2013

The reality of the new fiscal cliff deal

Who benefits most in the new "fiscal cliff" deal?

BY Mary Grace Keiner

Finally bipartisan found the common ground and agreed to avert "fiscal cliff" of tax hikes and spending cuts that could lessen the deficits.
"I think we all recognize this law is just one step in the broader effort to strengthen our economy and broaden opportunity for everybody," Mr. Obama said Tuesday night. "The fact is the deficit is still too high. And we're still investing too little in the things that we need for the economy to grow as fast as it should."
This is an upsetting news for those wealthiest Americans because their going to pay higher taxes after the deal passed in the House of Representatives Tuesday night.
The House passed the bill without amendments by a margin of 257–167 around 11 p.m. EST on January 1, 2013.
'Middle Class' taxpayers and low-income taxpayers are the beneficiaries of this deal. Meaning the bill would boos the top 35 percent income tax rate to 39.6 percent for income tax exceeding $400,00 for individuals and $450,000 for couples; a phase-out of certain tax deducations and credits for those with incomes over $250,000 for individuals and $300, 000 for couples.
Its a another victory for President Obama, just like what he promised during his campaign last year. His proposals is somewhat hard to accept by some parties, but for the country the lawmakers joined forces to passed the bill.
"A central promise of my campaign for president was to change the tax code that was too skewed towards the wealthy at the expense of working middle-class Americans," Obama said at the White House before flying to Hawaii to resume his holiday break. "Tonight we've done that."
Although European companies and investors will hardly see any direct taxation effects, corporate taxation of their US subsidiaries may change significantly.
The CBO also estimated that the total reductions to the fiscal year 2013 deficit by letting current laws take effect (which increase taxes and reduce spending) would be about $560 billion.
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