What is the Fiscal Cliff?
- The fiscal cliff is a term referring to
the effect of a number of laws which (if unchanged) could result in tax
increases, spending cuts, and a corresponding reduction in the budget deficit beginning
in 2013.
- “Fiscal cliff”
is the popular shorthand term used to describe the conundrum that the U.S.
government will face at the end of 2012, when the terms of the Budget
Control Act of 2011 are scheduled to go into effect.
- It is meant to describe several
big events, all fiscal in nature, that are set to occur in the U.S. at the
end of the year.
These include:
ü The expiration of tax cuts
initiated by Mr. Obama’s predecessor, at the end of 2012, including current lower tax
rates on capital gains, dividends, income, and estates
ü The expiration of stimulus
measures like payroll tax cuts and extended unemployment benefits.
ü Spending cuts scheduled to
be triggered automatically in January.
RAZI ANWAR
PGDM 2nd year
PGDM 2nd year
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