The Fiscal Cliff is on everyone’s mind, as the Budget Control Act of 2011 will go into effect on December 31, 2012. According to Money Morning, substantial concerns weigh heavily on the tax increases and spending cuts, which will likely be somewhere around $600 billion or more.
The 2001-2003 tax cuts will come to an end, for businesses taxes will rise and so will taxes for nearly all working folks in the U.S. Temporary pay roll tax cuts of last year will cease, which is said to increase taxes by 2% for workers. Once the Budget Control Act implements, discretionary spending will be capped and cut, a supposed savings of $917 billion over the next 10 years.
House speaker John Boehner and the President have yet to reach a deal that would prevent raised taxes on every American come next Monday, December 31st. However, final negotiations and reaching a satisfactory resolve is the likely goal, as President Obama is due to return to Washington sometime tomorrow. President Obama cut his holiday vacation short in hopes to reach some sort of bi-partisan deal.
The biggest push by President Obama and Democrats, according to CNN, is to avert tax increases on lower income earners:
“The main dispute continues to be over taxes, specifically the demand by Obama and Democrats to extend most of the tax cuts passed under President George W. Bush while allowing higher rates of the 1990s to return on top income brackets.”