Economics Report - 'Fiscal Cliff' Avoided, but Not Solved

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VOA Learning English, this is the Economics Report in English. On January 1, both houses of the United Congress approved a plan to increase taxes for most . This agreement avoided much larger tax increases that were to take effect this year. After signing the bill, Obama said it was important to have a balanced to the country's fiscal problems. In the final months 2012, the country faced a combination of higher taxes automatic budget cuts that were being called the "fiscal ." The fiscal cliff was avoided, but more remains to done. Congress has given itself more time to decide to cut the federal budget. Increased tax revenue and reductions are needed to reduce the federal deficit, which over $1 trillion last yearThe new law increases the rate on individuals with earnings of over $400,000 and couples with earnings of over $450,000. All working Americans have some kind of tax increase. This is because share of Social Security taxes paid by employees will to 2010 levels, an increase from last year of percentBut the largest part of the tax increase will those with a lot of investment income and those very high wages. Taxes on investment gains and dividends payments from some kinds of securities will increase as . Also, the top income tax rate will go to percent from 35 percent. Overall, the effect of the is simple. It will be the first major tax in 20 yearsIn addition, lawmakers are facing difficult budget . On March first, big, automatic budget cuts, or sequestration set to take place across the federal government. For Learning English, I'm Carolyn Presutti. (Adapted from a radio broadcast 11Jan2013)

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