Congress permanently extended the Bush income tax cuts at $400,000 and below, kept the estate tax threshold at $5 million and extend unemployment benefits for one year.
The frustrating part about the past couple years is Congress inability to get things done in a timely manner...keeping those on top of their money game waiting for what to do. Last year we waited till the last minute of 2011 to get the debt ceiling raised. (Which was reached on Monday 12/31/2012...it's like getting an expanded limit on your credit card and you maxed it out again!)
This past year of 2012, we sat waiting to see if we'll fall over the fiscal cliff and hoping we have a financial parachute, again, 3 hours before the midnight deadline. Threats to middle-income Americans increase of personal income tax rates, your employer keeping more of your gross pay for the IRS and those with estates over $1M would be immediately impacted.
Think about it, how many Senators actually reviewed the 157 page document to vote with discernment over a 3-4 hour period before voting?
Sounds like haphazard drama to me, considering that this fiscal cliff would financially paralyze most small business owners on what they could do in order to create more jobs or make capital investments in their business to grow their enterprise.
For most middle-income Americans and small business owners with incomes below $400k (joint-filers $450k)...good news. Your income taxes WILL NOT go up. For the most part, the Bush-era tax cuts are still preserved. But a "sequester" or issue to set aside the huge spending cuts, is delayed for approx. 2 months.
In other words, even if Congress had plenty of time to decide upon spending cuts to ax, they still don't have a decision made upon the deadline. They need more time.
Now, translate all this to how you would handle your own personal finances. The government set an example of financial actions that create a psychology of poverty, easy spending of other people's money, asking for more credit because you can't make the payments on the bills you've already promised to pay and enslavement to other people that bail you out of your own lack of financial management.
Is this the way you want to run your financial home? If you need to make a financial decision to put yourself in a better position, act NOW and act DECISIVELY. Don't follow your favorite family member, Uncle Sam, and procrastinate.
Breathe no sigh of relief, there are still months, possibly years ahead of budget negotiations. But as a person handling their own personal finances, do not follow the government as an example of deciding to stop foolish spending. If you're living above your means, look in the mirror and say, "I deserve better than working hard for everyone else!" Have money work for you instead...collect interest instead of paying it out!
How much of your time and money go to pay what you owe to other people? (Let alone, the amount you have leaving your paycheck to TAXES in which the government had shown poor stewardship over.)
Stop letting the control of your own financial future lay in the hands and choices of someone else. Take change of your financial situation and don't wait till the last minute to figure of what your choices are.
After all, there won't be many if you do.