Late last night the House of Representatives passed the "Fiscal Cliff" Bill to avert the fiscal cliff- the largest tax increases in American history. The entire ordeal is all about taxes. This measure is significant for many reasons, one being that the US tax structure has not seen substantial change like this for many years.In policy terms, the bill makes permanent most of the tax rates that were set only temporarily in the Bush era. The new legislation also permanently keeps the middle class from being hit by the alternative minimum tax, a 1969 set of tax exemptions intended only for the wealthy.
The bill raises income tax rates for the first time in almost two decades and fulfills the President's signature campaign promise to prevent rates from rising on the middle class. Not since 1991 has a Republican in Congress supported such a move.
President Obama appeared in the White House press briefing room just minutes after the House passed the bill. With Vice President Joe Biden by his side, he stated: "Thanks to the votes of Democrats and Republicans in Congress I will sign a law that raises taxes on the wealthiest 2% of Americans while preventing a middle-class tax hike that could have sent the economy back into recession and obviously had a severe impact on families all across America." President Obama said he would like to take additional steps to reduce the nation's deficit.
The House voted 257-167, with 172 Democrats joining 85 Republicans in supporting the measure.
This new legislation carries significant taxation, economic, and political effects for the entire nation. We are witnessing history.
In case much of the terms and doesn't quite make sense, be sure to visit a previous post defining the Fiscal Cliff.
Thanks for reading,