Fiscal Cliff
The Fiscal Cliff
By: Shannon Mannella
Macro W 6-8:45
What is the fiscal cliff? I asked myself this question before righting this paper. I though “why do I need to know about the fiscal cliff”, well I guess because I have to right about it. But seriously I think that there is no real answer to that question, I think that we all just pretend like we know what it is to move past that subject. Well at least it was a good laugh to think so. So the term fiscal cliff is a term they use to describe a bundle of momentous U.S. Federal tax increase and spending cuts that are due to take place at the end of 2012. That basically means the fiscal cliff is used to describe the meeting of two events that took place on December 31, 2012. Those two events are the expiration of almost every tax cut enacted since 2001 and a scheduled reduction in government spending.
This means that the fiscal cliff has the tax cuts as one of its components. Of those taxes that are expiring some are the bush-era tax cuts, which were supposed to expire in 2010 but were, extend till 2012 by the tax relief. There is the Obama-era tax cut which includes increased child tax and earned income credits and it expanded the education credit. There is also Obamacare taxes, which has taxpayers earning more than $250,000, will pay more on their wages and their unearned income. The estate tax, expiration of the AMT patch, temporary payroll tax cut and extenders are just a few others to expire.
Government spending cuts are another component which, include the Budget control act of 2011. Numerous amounts of the scheduled annual cuts will come from the national defense and the other have from the, you guessed it, non-defense, although almost 70 percent of the mandatory spending will be omitted. The extended unemployment benefits for the eligibility to start getting federal unemployment benefits will also expire. Another one would be the Medicare doc fix which allows the rate of which Medicare pay
By: Shannon Mannella
Macro W 6-8:45
What is the fiscal cliff? I asked myself this question before righting this paper. I though “why do I need to know about the fiscal cliff”, well I guess because I have to right about it. But seriously I think that there is no real answer to that question, I think that we all just pretend like we know what it is to move past that subject. Well at least it was a good laugh to think so. So the term fiscal cliff is a term they use to describe a bundle of momentous U.S. Federal tax increase and spending cuts that are due to take place at the end of 2012. That basically means the fiscal cliff is used to describe the meeting of two events that took place on December 31, 2012. Those two events are the expiration of almost every tax cut enacted since 2001 and a scheduled reduction in government spending.
This means that the fiscal cliff has the tax cuts as one of its components. Of those taxes that are expiring some are the bush-era tax cuts, which were supposed to expire in 2010 but were, extend till 2012 by the tax relief. There is the Obama-era tax cut which includes increased child tax and earned income credits and it expanded the education credit. There is also Obamacare taxes, which has taxpayers earning more than $250,000, will pay more on their wages and their unearned income. The estate tax, expiration of the AMT patch, temporary payroll tax cut and extenders are just a few others to expire.
Government spending cuts are another component which, include the Budget control act of 2011. Numerous amounts of the scheduled annual cuts will come from the national defense and the other have from the, you guessed it, non-defense, although almost 70 percent of the mandatory spending will be omitted. The extended unemployment benefits for the eligibility to start getting federal unemployment benefits will also expire. Another one would be the Medicare doc fix which allows the rate of which Medicare pay