WatchWASHINGTON (AP) — A typical middle-income family making $40,000 to $64,000 a year could see its taxes go up by $2,000 next year if lawmakers fail to renew a lengthy roster of tax cuts set to expire at the end of the year, according to a new report Monday
Taxpayers across the income spectrum would be hit with large tax hikes, the Tax Policy Center said in its study, with households in the top 1 percent income range seeing an average tax increase of more than $120,000, while a family making between $110,000 to $140,000 could see a tax hike in the $6,000 range.
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http://news.yahoo.com/huge-tax-increase-looms-end-fiscal-cliff-155135586--finance.html
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I'll be the first to admit.. If most of these tax cuts for the middle class aren't extended... A housing market double dip is imminent, as well as a 2nd depression. Your talking about $2000-$6000 after tax income disappearing. That kind of household income loss isn't going to be pretty for our economy.
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That's just it, say goodbye to all middle class vacations next year and a steep drop in discretionary spending.. and even upper middle class.
It's gonna be bad, with just the payroll tax cuts.. Everyone's gonna wake up Jan. 1st and notice they are short $50-$150 per paycheck. That's not even factoring in bush tax hikes.
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Laguna Beach, CA
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A wise man once said, "All civilizations come to an end in grim and macabre ways."
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Yup says
There wasn't much talk about extending in 2011 either leading up the actual extension. This year nothing will get done until post-election.. And then it will be a mad rush to quickly extend everything for 3 months until after Christmas. Unless Obama or Romney, whoever is elected, want another recession/depression they've got to extend a good chunk of the cuts.
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Goran_K says
Like Roman Empire. But wait,we are the USA. It is different here. We are above laws of economics.
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San Jose, CA
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bubblesitter says
Extend and pretend baby!
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BoomAndBustCycle says
THAT IS CHANGE YOU CAN BELIEVE IN
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Yawn.
Really, somehow we all survived in the 80's and 90's when we paid these higher tax rates. Now it'll be Armageddon if we have to pay those same tax rates again?
Really, the extra money into the federal budget will reduce the federal deficit and that's a bad thing how?
Sorry, the FUD bugs me. Last year we had wages of $135K or so, AGI of $124K or so, and a refund of about $3000. So I won't get a refund in 2014 when I file my return of 2013? Oh well.
Seriously, this is about a likely to be noticed by regular folks as was the "reduction" in taxes collected on FICA. I didn't really notice a difference in spending power then so why should I notice a difference now?
Note again that my refund was about what's going to disappear. My take home probably won't change, nor will my family's spending. We buy what we want, when we want, pay off the credit card every month and still can put away for retirement. Now, maybe that's because we chose to live in TX where we can have a 2010 built 2500 sq ft house for a P&I of $1000. (Yes, we pay over $4K/year in property taxes on assessed value of $370K or so). That's a choice we made, we're happy with it, and maybe other people need to assess their choices.
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Los Angeles, CA
Erikintx says
Because we were getting regular raises and bonuses in '80s and '90s. A little easier to cover those higher tax bills when you have inflation on your side.
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Los Angeles, CA
Erikintx says
People who view tax refunds as some type of free money are a lost cause when it comes to economics.
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It will be painful for those of us living in the bay area who are treated as "rich" by federal tax codes.