With New Year’s just around the corner, all eyes are turning to Washington, D.C., where lawmakers are working to prevent America from falling off the so-called fiscal cliff.
That cliff, according to the Huffington Post, is the automatic activation of budget cuts and tax hikes that will kick in on Jan. 1, 2013, if something isn’t done to prevent them.
As it stands right now, no agreement has been reached between the Democrats and Republicans to prevent the financial changes from occurring. Some economists say the budget cuts and tax hikes will catapult America back into another recession.
President Barack Obama has cut his holiday vacation short, according to the Post, and is returning to Washington to try and work out a deal. Republicans and Democrats cannot agree on a solution.
Of particular concern to many is the potential for middle class families – those that earn less than $250,000 a year – to see significant tax hikes on Jan. 1. The White House estimates the average increase on families at $1,600 a year. The hikes are anticipated to hit about 114 million middle class families.
What do you think about the potential tax hikes? How would an extra $1,600 out of your paycheck impact your family? Would you have to cut things out of your budget? How would you resolve the issue if you were a Washington lawmaker? Share your thoughts, concerns and ideas in the comments section.