Yesterday, the US Congress passed a bill that would avoid what we are calling a “fiscal cliff.” What exactly would’ve happened if we went over this fiscal cliff? Would the US go into bankruptcy? Would hundreds of government employees lose their jobs? What danger were we in??

Here’s a brief explanation of what would have happened if we went over the cliff:

• The end of last year’s temporary payroll tax cuts
• The end of certain tax breaks for businesses
• Shifts in the alternative minimum tax
• A rollback of the “Bush tax cuts” from 2001-2003
• The beginning of taxes related to Obama’s new health care law

To put it plainly, the Fiscal Cliff had to do with a big increase in taxes. The largest increase would have been the expiration of the Bush tax cuts.

Here’s what the issues were and why the decisions that were made came down to the line. Republicans wanted to cut government spending and avoid raising taxes, while Democrats wanted a combination of spending cuts and tax increases. The final agreement (as of yesterday) was to raise taxes from 35% to 39.6% on individuals with an income of more than $400,000 (or couples with more than $450,000), let the 2% payroll tax cut expire and then delay the spending cuts for another 2 months.

Now, here’s what the media DID NOT report. Last year, before the election, the Bush tax cuts were set to expire, but Obama decided to extend them for 1 year. One year! Why 1 year? Why not 4 years? The answer: All he needed was your vote, so he decided to not increase any taxes the year before he ran for re-election. So in all actuality, the US was facing a fiscal cliff at the end of 2011. Did you know about it? Of course not!

I know that for most people, a tax increase like this doesn’t affect you, but it affects our country as a whole. Thousands of small businesses are going to be forced to figure out how they’re going to pay for this new tax. Chances are, they’ll be firing employees, cutting hours and benefits or postponing new hires that they had planned on making. Let’s just keep hoping it won’t affect you.

Another thing about this “deal” is that it doesn’t increase revenue or cut spending enough to do anything about this enormous debt issue we’re already dealing with! I guess that’s another discussion for another time.

God bless the USA. Please.