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The American Taxpayer Relief Act: Unresolved Issues
Posted in Tax and Finance

Despite the American Taxpayer Relief Act of 2012 clarifying many uncertainties for the American public, it still failed to address a number of important issues, including spending cuts, the debt ceiling and tax code reform. One such issue that remains on hold is the sequester:

The sequester is a series of budget cuts that was scheduled to go into effect Jan. 1, 2013, in accordance with the Budget Control Act of 2011. However, these cuts were ultimately delayed until March 2013 by the Act. The sequester is intended to make cuts to discretionary appropriations and mandatory spending that add up to roughly $1.2 trillion over a nine-year period. In general, these cuts are split between defense and discretionary spending (e.g., social security, Medicare, Medicaid and other benefits). The Office of Management and Budget was given the authority to carry out the sequester, but it is uncertain exactly how the spending cuts will be implemented. The spending cuts are to be evenly divided among each of the nine sequester years, which totals roughly $109 billion per year.

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