The Fiscal cliff is the term being used to describe a possible perfect storm of economic calamities that the United States is currently on track to hit in the near future. A series of tax cuts – some of which date back as far as the George W. Bush presidency – are set to expire.
Most of the so-called "Bush tax cuts" were targeted at the ultra-rich, but a payroll tax cut is also set to end, which will mean a two per cent tax hike for all salaried workers. Other tax breaks on things like the alternative minimum tax and the unemployment extension kick in, just as the first round of taxes related to President Obama's health care plan become law.
Add it all up and it's a bigger bill than American taxpayers are used to. That's all happening against the backdrop of a bunch of spending cutbacks coming into effect that the administration agreed to during America's acrimonious debate over raising the debt ceiling in the spring. All in all, it's been estimated that as many as 1,000 government programs are on the chopping block.
The increase in tax revenues might be good for Uncle Sam's finances, but the end of those tax breaks is going to mean less money in real people's pockets.
Read more: 4 things to know about the 'fiscal cliff' - Business - CBC News
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