Fiscal Cliff

     The Fiscal Cliff is thought of as the 500 billion of tax increases and spending cuts that will influence the nation's people and take affect after January 1 (called fiscal year of 2013, etc. ). Ben Bernanke made this term to warn the nation of the dangerous and unavoidable drop off in the direction of the nation's tax increases and cuts. For instance, the Bush Tax cuts of 2001 and 2003 were extended to 2012 (they were originally going to expire in 2010), lowered the taxes on the wealthy to 35%. Obama kept this tax rate here even though he desired to raise it to 39% because the economy was still in a weakened state in 2010. If he had raised the taxes, the government could have brought in one trillion dollars in taxes that would have helped lower the country's deficit.
     The Alternate minimum tax (AMT.) is apart of the nation's fiscal cliff because this is a tax people pay on top of their regular income tax. This tax is designed to prevent people with a very high income from utilizing special tax benefits to pay no to small amounts of money in taxes. But, now this tax reaches people who don't have a high income or don't claim many special tax benefits, which causes many individuals to pay more taxes unduly. Also, this tax is theoretically supposed to determine the amount of money a person would pay a specific income. This is part of fiscal cliff because it's a type of tax that influences the amount of taxes the people pay, but also shows that this tax is hard to come to an agreement on who gets taxed, anyone can be taxed.
      The Sequester is also another example of the spending and tax cuts that is the Fiscal Cliff. The sequester is a package of automatic spending cuts that makes up the Budget Control Act (BCA) that was passed in August 2011. This is projected to cut 1.2 trillion of spending split evenly on defence and discretionary domestic spending (exempting war spending, and spending on social security and Medicaid) over the years of 2013 to 2021. This can cause problems because it may lead to major job loss to companies subsidized by the government, but also the aid given to the people like social programs. This is supposed to help keep the economy from obtaining a too high debt by cutting its spending.