The so-called fiscal drama is finally over! The House of Representatives approved a Senate bill to avoid the “fiscal cliff” on Tuesday, CNN reports.
America cringed as the impending fiscal cliff neared at the end of the year that would result in spending cuts and the highest middle class tax hikes in two decades. The new deal maintains the Republican tax cuts for most Americans, but still increases rates on the wealthy. Individuals with incomes above $400,000 and married couples who earn more than $450,000 will experience tax hikes in the new year. Capital gains taxes will also rise for these individuals. Additionally, taxes on estates worth $5 million and higher will rise from 35 to 40 percent.
Unemployment benefits that were set to expire will be extended for one more year.
The House voted 257-167, with 172 Democrats joining 85 Republicans in supporting the deal. It makes permanent the Bush era tax cuts that were set to be just temporary. Although the deal defers some of America’s spending problems, it doesn’t come close to the $4 trillion deficit-reduction deal leaders had hoped. It will, though, cut the country’s deficit by $600 billion over 10 years.