What was Kept

 

I have been following the fiscal cliff ordeal very closely and when a deal was still not reached by December 31 I was bracing myself for the worst. Thankfully, a deal was reached on January 1. There was no deal on deep cuts but people making over $400,000 will see their taxes significantly raised and there are other parts of the deal. For families who were worried about losing money on significant tax credits they can stop worrying. According to CNNMoney.com ” Earned Income Tax Credit,which is estimated to keep millions of Americans out of poverty each year and especially benefits working parents with children, will also be restored for five years rather than being scaled back”. Also the Child and Dependent Care Tax Credit was extended permanently. The coming fight will be on raising the debt ceiling and further cuts in order to balance the budget.  I just hope that it wont be all drama when that time comes. The only tax credit that was cut was the payroll tax. A cut in the payroll tax means that workers will see smaller paychecks. According to CNNMoney.com “Roughly 160 million workers can expect to pay more payroll tax, which funds Social Security, in the new year. People earning the national average salary of $41,000 will get $32 less in their biweekly paychecks. Shivers, who makes $84,000, will see his annual pay shrink by a total of $1,700.”  Click here to read the full CNNMoney article.

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