Details emerge in 'Fiscal Cliff' deal
Updated On: Mar 26 2014 07:37:03 PM CDT
Details are starting to emerge about what the "fiscal cliff" compromised will mean to ordinary Americans.
The most important thing the deal accomplishes is preventing higher income taxes from going into effect on more than 99 percent of Americans.
Only those who make more than $400,000 dollars a year ($450,000) for married couples) will be hit with a higher income tax rate, with the top bracket rising from 35 percent to 39.4 percent. But everyone's Social Security withholding will be going up two percent, back to where it was a couple years ago, from 4.2 percent to 6.2 percent.
A solution to the Alternative Minimum Tax problem is also part of the deal. That tax was conceived in 1969 when it became known that 155 high income households paid no income tax at all due to credits and deductions. Over the years, more and more households have had to pay the tax because inflation boosted ordinary incomes to levels that were considered wealthy in 1969. It will now be indexed to inflation, which will prevent an ever-increasing number of households from having to pay it.
Benefits for the long-term unemployed will be extended for one more year.
Estate taxes are rising from 35 to 40 percent, but the only for estates worth more than $5 million dollars.
Breitbart.com reports that the ratio of tax hikes to spending cuts in the deal is 41 to 1.
The debt limit is unaffected. You can expect another big battle over that in a couple months.
The cuts scheduled to hit the military are only postponed for a couple months. The Huffington Post reported that Senate majority leader Harry Reid was incensed that Vice President Joe Biden agreed to a delay of only two months, because that will come up again at the same time as a debt limit extension.
The deal contains no reform on the cost of entitlements that are driving much of our debt. There will be another battle over that to come.
Very little is changed regarding government debt. It continues to expand - about a third of every dollar spent by the federal government is borrowed.
Both of Texas's Republican senators, Kay Bailey Hutchison and John Cornyn voted for the deal, as did both of New Mexico's Democratic senators, Jeff Bingaman and Tom Udall and El Paso's Democratic congressman, Silvestre Reyes. Rep. Steve Pearce (R) - Las Cruces and Rep. Quico Canseco (R) - West Texas both voted against.
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