When Direct Capital left our Congress coverage before the holidays, they were working furiously to complete a deal to avert the so-called fiscal cliff. Furiously being a relative term.
The important thing, ultimately, was that lawmakers avoid the inevitable consequences of the fiscal cliff. Small businesses were concerned that without extensions of the Bush-era tax cuts and other cuts, they would be hit hard. And thankfully, that crisis has been averted. So why is nobody happy?
It’s the nature of the deal. Liberals really didn’t want to see the Bush-era tax cuts extended, and didn’t get nearly as much revenue to off-set the debt as they had hoped for. Conservatives felt spending cuts were not addressed and weren’t thrilled with some of the payroll tax increases. The deal, which will save about $800 billion over a decade and avert some of the most major tax increases and financial issues that were troubling Americans, is being seen as too little.
We should give Congress some credit for getting to a deal at all, considering the partisan rancor that has dominated Washington for years now. But that credit should be tempered by the fact that this really isn’t a terrific deal. Congress
And small businesses? Unfortunately, your taxes are going up this year, and your employees’ taxes are rising as well. This is something you need to be fully aware of and go over with your employees so they understand why there are more taxes coming out of their paychecks, and how they can deal with it. 2013 may well be a great year for your business, but this certainly represents an early challenge.
If you never really understood what the fiscal cliff was all about, check out this BizEngine rundown. With spending cuts still on the table, we haven’t heard the last of this particular debate, but we don’t have to worry about running off the cliff for the moment, at least.
Your thoughts on the fiscal cliff deal?
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