Plan B Tough Pill To Swallow. FISCAL CLIFF UPDATE

US-House-Speaker-John-Boe-007Republican Representative and Speaker of the House John Boehner got caught with his pants down last night… and what we saw wasn’t impressive. His “Plan B” bill, which was supposed to be a backup in the event that a deal on the fiscal cliff could not be reached, was abruptly taken off the table. Here’s the latest:

What Was “Plan B”?

“Plan B” would have increased taxes on people making more than $1 million a year while maintaining current cuts for everyone else. It was meant to prove that Republicans were working to provide solutions to the Fiscal Cliff while Senate Democrats were not – a plan that clearly back-fired.

Why Did It Backfire?

In the end, Republicans were not interested in supporting a bill that would increase taxes on anyone (particularly the wealthy 1-2% that voted them into office) if there was a chance it would not get passed by the Democrats.

What Happens Next?

If lawmakers fail to work out any sort of deal, 98% of us will see our taxes go up by an average of $3,500 a year. Economists also say that no deal will push the economy into a new recession.

The Grappler’s Take

Calling this mess a “cliff” is a bit misleading. If we do go over the “cliff” and a deal is then worked out in January, many of us would see higher taxes at the start of the year, but would be reimbursed once tax changes are applied retroactively (you’d receive a “bonus” in you next paycheck).

Don’t get caught up in the hype – both sides agree it would be very dumb to raise taxes on 98% of Americans so it’s unlikely you’ll end up much worse off over the long run.

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