If you are following American news, you of course may know about the “Fiscal Cliff” that our economy might experience on January 1, 2013. On that day, the temporary tax cuts commonly referred to as “the Bush era tax cuts” expire. Additionally, the Obama era tax cuts (which nobody seems to think happened, but are the 2% FICA tax holiday) expires. Thirdly, Congress agreed to cut $100 billion or so from defense and certain entitlement programs, as part of last year’s phony debt crisis.
You see, it’s all been kicked down the road. And, suddenly, that faraway date on the calendar is less than 6 months away.
What’s grating to me is to keep hearing about how “Obama wants to keep the tax cuts except for the top two percent!” of high income earners. That’s not true—he’s keeping tax cuts for everybody. What is different is that he doesn’t want the earned income above $250,000 to apply towards more tax cuts. Millionaires get the same (rather large) tax cut that the person making $250,000 gets. Everyone who’s paying income tax is getting these tax cuts.