General Question

NostalgicChills's avatar

What is the Fiscal Cliff?

Asked by NostalgicChills (2787points) January 10th, 2013

Yes, I realize I can google it and do research- No, I’m not too lazy to find out for myself- I’d just much rather hear from you guys. You’re all awesome.
So tell me please, in plain English, what is the Fiscal Cliff and why is it such a big deal? I’m eager to learn.

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12 Answers

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dxs's avatar

@gailcalled I have no idea what it is either, and it seems that any website I look at confuses me. I feel like a person will do a better job at explaining it.

KNOWITALL's avatar

It’s kind of a ‘point of no return’ for the US economy because the govt keeps delaying putting together a balanced plan, and of course our political parties can’t get along at all to find a bi-paritsan plan. The threat is that we’ll end up like Greece.

harple's avatar

This photo shared on facebook gives a pretty good explanation…

NostalgicChills's avatar

Oh okay, that makes a lot more sense. Thank you.

Rarebear's avatar

It’s an entirely artificial deadline created by Congress because they can’t get their act together.

picante's avatar

Cruel artiface; arrogant leadership; self-inflicted wounds. Rarebear nailed it.

SadieMartinPaul's avatar

I’m joining-in as Fluther’s resident tax CPA.

During the past decade, a number of pro-taxpayer changes were enacted. Among them—FICA tax cuts for employees, certain tax breaks for businesses, shifts in the alternative minimum tax, more lenient retirement/deferred compensation provisions, significantly higher thresholds for estate and gift tax, and overall rate cuts. Many of these changes were scheduled, at the time of their enactment, to sunset after 12/31/12. Thus, the term “Fiscal Cliff” meant that unless the changes were extended or made permanent, they’d automatically revert to previous law on 01/01/13.

The impending doom wasn’t anything new or unexpected. For many years, it was no mystery that the tax revisions would expire, at the end of 2012, without Congressional action. But, instead of being responsible, Congress used the Fiscal Cliff as a political football to kick around. Taxpayers were left in limbo while Congress waited until the eleventh hour to adopt a sloppy, thrown-together package.

This is no way to run a country.

KNOWITALL's avatar

@PaulSadieMartin Excellent and concise!

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