Fiscal Cliff Bill Raises Taxes For Most [VIDEO]
The tax package negotiated by President Barack Obama and Senate Republicans and passed by Congress will protect 99 percent of Americans from an income tax increase.
But that doesn’t mean that most of them won’t see their taxes rise.
In fact, the vast majority of workers will pay higher federal taxes in 2013, largely because a temporary reduction in Social Security payroll taxes expired on New Year’s Day. The tax package did nothing to prevent that from happening.
A nonpartisan Washington research group, The Tax Policy Center, estimates that 77 percent of American households will face higher federal taxes in 2013 under the agreement. High-income families would get the biggest tax increases, but many middle- and low-income families will pay higher taxes too.
The bill will avoid, for now, the major tax increases and government spending cuts that had been scheduled to take effect with the new year.
Final approval came in the House on New Year’s Night. The vote was 257 to 167.
The Senate passed the bill less than 24 hours earlier.
The measure raises tax rates on incomes over $400,000 for individuals and $450,000 for couples, a victory for President Obama.
It also extends expiring unemployment benefits for the long-term jobless, prevents a cut in fees for doctors who treat Medicare patients and cancels a $900 pay increase due to lawmakers in March.
Another provision is designed to prevent a spike in milk prices.
Late Tuesday night Obama told reporters in the White House briefing room he will “sign a law that raises taxes on the wealthiest two percent of Americans while preventing tax hikes that could have sent the economy back into recession. He spoke with Vice President Joe Biden at his side, a recognition of Biden taking the lead Democratic negotiating role in final compromise talks with Senate Republican Leader Mitch McConnell.
Obama is now getting ready to leave Washington and return to Hawaii. Obama spent five days of vacation with his family in Hawaii.before returning to the White House last Thursday to meet with congressional leaders in fiscal cliff negotiations.
(Copyright 2012 The Associated Press. All Rights Reserved)