Tumbling Towards Fiscal Cliff
By: Stephen Bond
Updated: December 31, 2012
"There's still significant distance between to the two sides" says Senate Majority Leader Harry Reid. The combination of billions in tax increases, spending cuts, and expiring tax breaks equals financial uncertainty for our country. And the most disconcerting part of it all may be the unknown.
Certified Public Accountant Mike Fitzgerald says, "We still don't know what's going to happen so it's hard for individuals to plan businesses to plan. And you still don't know what to plan for. So if you had an 8 month warning that income taxes are going up or that spending's coming down, you can make due and plan for what's going to happen." Also, American's will now see smaller paychecks because payroll tax cuts will be expiring. "Not only affect the wealthy but everybody. Up and down the board we're going to see tax increases. Estate taxes are subject to change and significant increases on Jan.1st. And then the tax on dividends and capital gains is also subject to significant increases on Jan.1st" says Fitzgerald.
Experts say these issues snowballed together to eventually create an avalanche. Fitzgerald added, "It's the fact that all these things are converged on the same date. The individual issues probably wouldn't seem so complicated or be so devastating, it's that they're hitting at the same time."
