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| Fiscal cliff avoided |
The Congress on Tuesday to extend the tax cuts for the low and middle class.
Despite heavy lobbying, the democracy worked and lawmakers voted for us the 98% the middle class and 97% of small businesses.
The last minute deal was reached between the leaders of both parties to extend tax cuts for the household less than $450,000 as well as unemployment insurance, payments to doctors, and raised the inheritance taxes to 40% from 35% over $5 million from an individual and $10 million for family.
Nevertheless, the social security taxes will go up from 4.2% to 6.2%. For $50,000 income, it means a $1000 tax hike.
The Senate voted upon the measures at early hours on the New Year's Day and approved them by 89 to 8 votes. The House voted upon them later in the day.
Meanwhile, the implementation of the spending cuts that have been agreed upon was delayed for two months. President Obama said in a statement:
Leaders from both parties in the Senate came together to reach an agreement that passed with overwhelming bipartisan support today that protects 98 percent of Americans and 97 percent of small business owners from a middle class tax hike. While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay.
This agreement will also grow the economy and shrink our deficits in a balanced way – by investing in our middle class, and by asking the wealthy to pay a little more.
What's more, today's agreement builds on previous efforts to reduce our deficits. Last year, I worked with Democrats and Republicans to cut spending by more than $1 trillion. Tonight’s agreement does even more by asking millionaires and billionaires to begin to pay their fair share for the first time in twenty years. As promised, that increase will be immediate, and it will be permanent.
There’s more work to do to reduce our deficits, and I’m willing to do it. But tonight’s agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans. And as we address our ongoing fiscal challenges, I will continue to fight every day on behalf of the middle class and all those fighting to get into the middle class to forge an economy that grows from the middle out, not from the top down.
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| We must pay it back. |
The new members of the House and the Senate will sworn in on Thursday. Let us hope the new legislation will come up with solutions to balance the budget, with less drama and less brinksmanship as the President promised.