A Layman’s Explanation of the Fiscal Cliff.

Two hours before midnight on New Year’s Eve, the Senate managed to pass a plan, by a vote of 89-8, thus averting the dreaded fiscal cliff. On New Year’s Day, the bill was approved by the House, even though John Boehner and other Republicans continued to be extremely difficult throughout the entire process. When the bill passed in the House, it became the first time in 20 years that tax rates increased for America’s wealthiest. The bill also extends the 10% individual tax bracket forever. Taxes will stay the same for most Americans, after approval. If you make over $400,000 or you and your spouse makes a combined $450,000, your taxes will increase from 35% to 39.6%. The same rate that it was during the Clinton-era. Inheritance taxes will increase from 35% to 40%, on estates over than $5 million. The bill also included a measure preventing a sharp increase in the price of milk that was feared early in the new year, and extending some other agricultural programs through September. What this means is the cost of milk will stay low.