BUFFALO, NY (WKBW)- Lawmakers in Washington have come to a compromise and pulled the nation back from the brink of financial disaster. Late last night Congress finally sent President Obama legislation that would reverse the effects of the 'fiscal cliff'. The measure extends tax cuts for all workers earning less than $400,000 a year. It also prevents a tax hike on estates valued at less than $5 million and extends unemployment benefits for some two million people. The payroll tax cut expired though and that means there will be an increase in taxes on salaries by 2% for every worker earning up to $110,000 dollars a year.
"The payroll tax was temporarily cut two years ago," said Ted Schmidt, Buffalo State College Associate Professor of Economics and Finance. "So it's going back to its regular rate, raising it 2 percent."
So what does this mean for the average Buffalo family? As an example, people making $60,000 a year will now pay $1,200 more each year in payroll taxes. If lawmakers did not pass this legislation and the country did fall over this so-called fiscal cliff, American Workers would have faced a huge jump in taxes. It would have also triggered billions of dollars in drastic spending cuts and local lawmakers say organizations like Roswell Park Cancer Institute would lose major funding.
"They receive funding from the National Cancer Research Institute to conduct trials," said Congressman Brian Higgins. "If you're diagnosed with last stage cancer, you don't have the luxury of time that these cuts would have demanded. That's what Sequestration would have meant to Buffalo and Western New York had it not been adverted."