What fiscal cliff means & its impact - KFDA - NewsChannel 10 / Amarillo News, Weather, Sports

What fiscal cliff means & its impact

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The majority of panhandle residents won't have to worry anymore about paying increased taxes if the fiscal cliff bill takes effect. The House of Representatives approved a bill last night to avoid that part of the fiscal cliff.

(R) District 13 Congressman Mac Thornberry says, "I think it is a significant accomplishment to lock in current tax rates for 98% of American taxpayers. And to make those permanent so we don't have this threat of expiring tax rates, increasing our taxes, hanging over us all the time."

However, families making more than $450,000 a year would have to pay more taxes. I asked a local economist doctor what this part of the fiscal cliff means. WTA&MU Assistant Professor of Economics Dr. Neil Meredith says, "We're approaching a situation where our debt is becoming unsustainable to a point where it's going to start damaging the macro economy. So we're going to have to pay more interest rates for borrowing for government spending."

The same bill would also extend the farm bill for the rest of the year and prevent a 27% cut in Medicare payments to doctors.

Thornberry says overall the fiscal cliff bill could affect our country in a positive way. He says, "I think that's going to be a very important factor in families, in small businesses. And it ought to help the economy have some stability so people can plan and hopefully grow."

While there may be some certainty for people in what they'll be paying for tax rates, Doctor Meredith says there are still lingering issues. He says, "I can understand that we might need to borrow because we're investing in infrastructure projects that may help the economy grow, but at some point you have to say we're borrowing too much. And we're heading toward a situation where it's not going to be good for the overall economy because the government is just going to have to keep spending more and money to borrow more and more money for increasing interest rates."

What Americans pay in taxes is only one phase of this complex bill. At least three other aspects of the fiscal cliff are yet to be resolved.

Jessica Abuchaibe, NewsChannel 10.