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 | As with 77 percent of American households, the main direct effect of the fiscal cliff bill, now passed by the House and Senate, is a 2 percent payroll tax increase. This will mean further belt tightening in the Whittington household here in Houston.
My wife works for the state of Texas, which by necessity has been frugal in a number of areas, including what it pays its employees. She is therefore taking a pay cut. I am self-employed, which means my self-employment tax will go up.
The main effect of the fiscal cliff bill will be indirect and there is a good news/bad news aspect to this. The good news is that our taxes are not going back to pre-George W. Bush levels, which would have been immediately catastrophic, as in eating-Ramen-noodles-every-night catastrophic. The bad news is that taxes are going up on the so-called rich, the very people who need to start and expand businesses in order to get the economy out of the current doldrums. That likely means that the economic malaise that the country has been experiencing will continue, which means less disposable income for people to buy -- say -- works of literature that could fatten the bottom line of yours truly.
Besides the special interest give-aways that were tucked into the fiscal cliff bill, benefiting everyone from Hollywood to rum distillers to NASCAR, the main tragedy of this spectacle of sausage-making was the lost opportunity it represented. The government could have enacted real tax reform, lowering rates and cutting out deductions to make the tax code more efficient and more conducing to economic growth and job creation. Entitlements like Social Security and Medicare could have been reformed. Obamacare could have been repealed. Wasteful domestic spending could have been eliminated.
Instead, because the president wanted his pound of flesh from the so-called rich, all of that is deferred to another time, hopefully before debt and economic malaise swallows the country.