Now that Congress has come to an agreement on how to solve the crisis surrounding the fiscal cliff, let’s look at what the bill means for the American taxpayer.
First, the good: 99% of Americans will not experience the bulk of the tax increases scheduled for 2013. The Bush Tax Cuts are here to stay save for individuals and families making 400k and 450k, respectively. There is also a delay for scheduled cuts in Medicare payments to doctors. Additionally, unemployment benefits have been extended for two years.
Now, the bad: Capital gains and dividend taxes will increase from 15% to 20% on the top 1% of Americans. A temporary 2% cut in payroll taxes was not renewed, meaning there will be a nominal increase in taxes for many Americans.
There’s also the two-month delay on sequestration and raising the debt ceiling. This time of uncertainty will put pressure on corporations trying to factor it into earnings. Overall, the bill isn’t the best outcome but it’s far from lousy. The extension of Bush Tax Cuts will bring a sigh of relief to many.