You all must have always been hearing about this
Fiscal Cliff which the US is worried about, all over the media. Many wonder
what is it exactly and how will it affect us sitting in India.
Well for the start, “Fiscal Cliff” is the popular
shorthand term used to describe the conundrum that the U.S. government was to
face towards the end of 2012, when the terms of budget control act of 2011
would have expired.
Simply stated it would end the temporary payroll
tax cuts (increasing tax by 2% for workers), the end of certain tax breaks for
businesses, shifts in alternative minimum tax that would take larger bite, a
rollback of the “Bush Era Tax Cuts” from 2001-2003. A reduction in spending by
the government, analogous to this in over 1000 government programs including
defense & medicare. Basically tax increase and spending cuts.
We all know what tax increase can do to individuals.
