Essay The Fiscal Cliff

Submitted By xinjianmint
Words: 578
Pages: 3

The Fiscal Cliff After reading the assigned articles The Economic Effects of the Fiscal Cliff by Douglas Holtz-Eakin and Ike Brannon, and Divided House Passes Tax Deal in End to Latest Fiscal Standoff by Jennifer Steinhauer, I learned many things about the Fiscal Cliff issue. In this essay, I will like to explain the detail of these two articles as well as some of my thoughts. After reading the articles, I understand that tax revenue and employment are the resources in our economy appear to be scarce. In the articles, the writers mention about raising the tax rate. The government wants to raise the tax rate, because they are not getting enough tax revenue to pay down the debt. The writers also mentioned that many people in America are unemployment. The economy is very bad right now, most employers are not hiring. So, many people cannot find a job. After reading the article, The Economic Effects of the Fiscal Cliff, I understand that the Fiscal Cliff will affect many people in America. People will need to pay much more in taxes, which means people’s income will be less. Also the price of everything will go higher. This will result that people will not willing to spend money. The Fiscal Cliff will also increase unemployment rate. People believe that it will results in a loss of 10 million jobs. The Fiscal Cliff will negatively affect the still recovering economy, because many businesses in our society will be collapse due to higher tax rates for business owners and low consumption rate. Also higher unemployment rate means lower tax revenue and higher unemployment benefits spending. So the Fiscal Cliff will negatively affect the still recovering economy. After reading Divided House Passes Tax Deal in End to Latest Fiscal Standoff, I know that the government will increase taxes on the wealthy. They extended the Bush Tax Cuts for all people with income under $450,000. Simply put, high-income people need to pay higher tax rate, and low-income people remain the same. Also the government will not cutting any benefit services, such as Medicare and unemployment benefit. However, this benefit services policies will be…