Fiscal Cliff, yo.

The Fiscal Cliff is a looming set of tax increases that are set to happen after January 1st, if no decision is made between Obama and the Republicans. This will involve more than $500 billion in increases; taxes will raise for almost everyone, and most businesses as well. January is set to be when a few other things happen, as well; the Bush-era rate reductions, a cut in payroll taxes, and smaller tax cuts for businesses and individuals. As well, about 1 in 5 tax payers will have to pay the alternative minimum tax.

The alternative minimum tax is an extra tax that is meant to prevent people who have high incomes from paying little or no taxes due to special tax benefits; however, almost anyone can be affected by it. The alternative minimum tax, obviously, determines a minimum amount of tax a person has to pay - those who already pay that much through regular taxes aren't required to pay any more, but if the regular taxes are lower than the alternative minimum tax, a person must pay more to meet it. Along with that, the Bush-Era tax  cuts will be ending as well; Obama wished to end them two years ago, but reluctantly decided to renew them in order to help stabilize the weak economy.

The Republicans wish to keep the Bush-Era tax cuts the same, but Obama wants to end cuts on those with high incomes - to prevent the wealthy from paying a very small amount of their taxes. Also adding to the fiscal cliff is the incoming debt ceiling - the US is heavily in debt, and we're rapidly approaching the limit of debt that the government allows. In order to help lower the debt, spending cuts are supposed to go into effect on January 1st, when the Bush-Era cuts are set to expire. With our debts so high, it's looking unlikely we'll be able to pay off our debts in time - which is likely to raise borrowing costs in the future. January of 2013 should certainly be an interesting month, to say the least.