Your Taxes Aren’t Going Up, But the Economic Fight In Congress Will Continue
Past deadline and kind of grudgingly, the House of Representatives passed legislation last night that will avoid big tax increases on the middle class, stopping our fall down the fiscal cliff. You’ll remember that technically, this was supposed to happen before January 1. But better late than never right? (Wrong, but OK.)
The margin for passage was 257 to 167; 85 Republicans, including House Speaker John Boehner and former Republican VP candidate Paul Ryan voted in favor, The New York Times reports. However, Majority Leader, Rep. Eric Cantor (VA) and the number three Representative from California, Kevin McCarthy, did not. The Senate approved the legislation the day before by a margin of 89 to 8, and there was some fear that the House was going to let it die amid amendments and debate. A rejection of the legislation would’ve meant not only a rejection of something that the Democrats and President Obama largely supported, but also a rejection of House Speaker Boehner and the Republican leader of the Senate, Mitch McConnell, who played a big role in crafting the legislation. (The Speaker already had one of his proposals voted down by his fellow Republicans.) Many policy experts and pundits on Twitter argued that if the deal hadn’t passed, the Republicans would take the blame. Even with the legislation’s passage, there are many who say this process will reflect poorly on the Republicans in the long run.
For the first time in 20 years, income taxes on the wealthiest will rise. Those individuals with an income over $400,000 and families with an income over $450,000 will pay more taxes. The tax cuts for those below that level are permanent. Payroll taxes, however, will increase. Politico has a breakdown of how that will impact your paycheck, via the AP and the Tax Policy Center. A sample:
Annual income: $40,000 to $50,000 — Average tax increase: $579 … Annual income: $50,000 to $75,000 — Average tax increase: $822 … Annual income: $75,000 to $100,000 — Average tax increase: $1,206 …
Unemployment benefits will also continue for two million people who were at risk of losing them. And spending cuts that were supposed to start today have been put off until March. “Conservatives complained bitterly that the legislation would raise taxes without making any significant cuts in government spending,” The Washington Post says. We’ve also avoided the dairy cliff, so go ahead and keep on drinking milk America!
During a press conference last night with Vice President Joe Biden, President Obama said the legislation will result in $620 billion in revenue for the country. But in just two short months, the fight will be on again as Congress discusses raising the debt ceiling (a debate that had everyone on edge in 2011) and sequestration, aka spending cuts.
There are also concerns that with these fights looming, the President won’t be able to address some of the other important issues that need to be tackled, like immigration, gun violence, and other changes to the tax code.
“Others are more optimistic, though, suggesting that even contentious issues such as immigration won’t be as politically perilous as raising taxes. Rewriting immigration laws is a complex task, but many Republicans and Democrats are motivated to pass legislation in an effort to appeal to the growing number of Hispanic voters,” writes The Wall Street Journal.