Danville, VA - Tuesday nigh, the House of Representatives approved a deal which would avert the fiscal cliff, bringing an end to the debate. But many people are wondering what this all means.
The Social Security payroll tax will affect most Americans. The reason is that legislation didn't do anything to prevent a temporary reduction in the tax from expiring.
That payroll tax is worth about $1,000 per year for a person who makes $50,000 per year. But the tax hike will be greater for high-income homes, that is individuals making more than $400,000 a year or families making more than $450,000 a year. Their taxes will now be 39.6%. The agreement passed extends the Bush-era tax cuts for those making under that amount.
Financial Advisor at Edward Jones Jim Abercrombie says the fiscal cliff made a difference in the stock market too because of a lack of consumer confidence before the deal was reached.
"There is still a lot of money on the sidelines, volumes are a little light, but things have pulled back a little bit but now the market is up real strong today since they've gotten past it," said Abercrombie.
Abercrombie says that earnings drive the market long term, political issues may just make a temporary change in the market.