Yahoo News asked readers to react to Washington's fiscal-cliff deal, forged late Tuesday night? Are they happy? Will they benefit? Here's how the agreement plays out for one American.
FIRST PERSON | America has avoided the fiscal cliff, but for me, a 40-something teacher from Davis, California, there will be some areas of the deal that will affect us, namely social security tax and further spending cuts. Although my family income is nowhere near the $400,000 ceiling for increased taxes, my self-employed husband will likely incur an increase in his social security tax, which he must fully fund himself. This could mean a decrease in our monthly income, which is tight already despite being slightly above the median US income of $50,054.
As parents of two teenagers, we will continue to benefit from the extension of the Child Tax Credits, and are encouraged that when our children enroll in college within the next few years they will receive college tuition breaks as part of the deal. Our long-term plans will need a bit of alteration; the increase in social security tax could lower our ability to contribute to our retirement accounts, something we have always made a priority. Despite college tuition breaks, the escalating tuition costs are still a constant worry, and with spending cuts still looming I am not confident that education will not take a financial hit. If tuitions continue to increase, tuition breaks will not be enough for us to finance two children's college educations.
In the end, I am encouraged that Democrats and Republicans were able to show compromise and the beginnings of a willingness to work together. I would like to see a bigger agreement, but this is a first step. Obama's concession to raise the tax threshold from $250,000 to $400,000 is not ideal; I do not consider $400,000 a middle-class income, even in California. Overall, I am happy with the deal.
- Politics & Government
- Retirement Issues