In an attempt to avoid the fiscal cliff, before large tax increases and spending cuts took effect, Congress passed a tax agreement Jan. 1 to allow income taxes to increase on the wealthiest 2 percent of Americans.
Now, individuals earning more than $400,000 and couples earning more than $450,000 annually will be taxed at 39.6 percent, the same rate as in the 1990s. Middle class tax cuts were permanently extended, in addition to several other tax cut and incentive extensions.
The agreement postponed the sequester for two months to give Congress time to work on a plan to cut spending and find additional sources of revenue.
Federal disaster funding for states to rebuild after Hurricane Sandy, which leaders hoped would be approved before Jan. 1, has yet to be approved.
