With the House vote this evening, Congress approved a bi-partisan deal to avoid several automatic tax increases and spending cuts that were scheduled to take effect on January 1, 2013. This important legislation prevents tax increases for millions of young working Americans. For example, Congress extended for 5 years the American Opportunity Tax Credit, which helps over 8 million students and their families defray the cost of higher education. Had Congress failed to extend the AOTC, college costs would have risen for millions of Americans next year. Most of the tax increases included as part of the deal are limited to upper-income earners. Many young workers, however, will see some tax increase due to the expiration of the payroll tax cut.
“Overall we are pleased that the President and both parties in Congress came together to prevent more severe tax increases that could have adversely impacted young Americans and all Americans,” said Aaron Smith, Executive Director of Young Invincibles. “Congress also extended provisions like the American Opportunity Tax Credit, Earned Income Tax Credit, Child Tax Credit, and unemployment benefits, that are important to young adults and their families.”
Smith added, “However, we remain deeply concerned about sequestration, which this deal only delays for two months. If Congress allows sequestration to take effect, it would be devastating for young Americans and for the economy. It will cut important education and job training investments vital to our future economic success and the middle class. We continue to believe that a balanced approach is necessary in dealing with these major fiscal and budgetary issues, one that protects and invests in the future of our country. It is critical that the voices of young people are heard in the next stage of this negotiation.”
For more information about fiscal cliff tax increases and young Americans see our fact sheet at: http://younginvincibles.