On January 1, just before 2 AM, the Senate overwhelmingly agreed to pass a bill that will avert the Fiscal Cliff. The House approved it later that night.
The bill is pretty straightforward. Income tax rates will only rise on those making over $400K (liberals wanted $250K, GOP wanted no taxes to rise). Spending cuts will be delayed for 2 months to give the sides more time to address them.
So why is the bill 157-pages long?
Because when Washington does business and passes a huge bill, there are all kinds of little other pre-existing tax things most Americans have never heard of, but which needed to be extended, that also get into the bill. It’s just how it works.
1. There’s a provision extending a tax policy related to Puerto Rican rum.
2. And a tax credit for 2- and 3-wheel electric vehicles.
3. Something having to do with Diesel Fuel:
4. An extension of some special rules for the film and television business.
5. A gift to the car-racing world.
6. Help to asparagus farmers.
Some might think this is nefarious — that politicians see a huge bill and then sneak in all these random things.
The reality is more like these have been around for a while, and every time a big bill comes up about taxes expiring, they get extended too.
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