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According to the latest news out of Washington, Congress has reached a verbal agreement to avoid many of the Fiscal Cliff tax hikes.Congress is still apparently fighting about spending cuts, so a deal has not actually been signed.
But the tax part of the deal is apparently done.
One important detail that many people are missing is that taxes are about to increase for all Americans.
Because, according to Suzy Khimm of the Washington Post, Congress’s agreement doesn’t include an extension of the payroll tax cut.
As a result, payroll taxes on the first $100,000 of income will rise from 4.2% to 6.2%.
That will reduce the after-tax income of households making $100,000 a year by $2,000.
So much for the idea that Congress wasn’t going to agree to any tax hikes on the middle class.
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