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 a 35-year-old single mother of three in Omaha, Neb., I have mixed feelings about the fiscal cliff deal reached by the U.S. House Tuesday night. While taxes were increased on wealthier Americans, decisions to cut federal spending were delayed by another two months, and no deals were reached to lower the national deficit. Additionally, the bill noticeably favors corporations. What about the average American? How will the fiscal cliff bill affect the "Average Joe" family like mine?
The first thing I noticed was that the payroll tax cuts that were enacted by Congress in 2011 ended Tuesday, Dec. 31. Even with a bipartisan support to approve the Senate's version of the fiscal cliff bill Tuesday, the tax holiday was not extended. What this means for a family like mine is that I will be paying an average of $8 more weekly in Social Security taxes. While that doesn't seem like much upon first glance, the monthly total in extra taxes coming out of my check will be at least $32 a month. That is a week's worth of gas, or an entire month's supply of milk for my family. Yearly, this adds up to about $350. I cringe when I think of where our family budget will take cuts. It is already mighty lean.
On the upside, some of the Bush-era tax cuts have been permanently extended. This is great news for my family and will protect more than 99 percent of American households like mine. The fiscal cliff bill will extend certain tax credits for families making less than $450,000 per year, and individuals making under $400,000 per year. Tax breaks that will help my family are the child tax credit, and individual as well as business tax breaks, since I own a small residential cleaning business. The child tax credit in itself is $1,000 per child. The child tax credit comes in handy for raising my children, who are 14, 11, and 6. The oldest and youngest are boys and my middle child is a girl. The child tax credit certainly helps curb expenses, especially those that are never-ending like clothes, school related costs, and extracurricular activities.
While I am certain I will miss the $32 a month that will no longer be in my paycheck, I am hoping that things will even out at the end of the year. I will still be getting the same amount on my tax returns that I am getting now, which is a nice safety net for my family to look forward to. All in all, I guess the deal doesn't seem so bad.