The fiscal cliff and you

Here's a quick way to understand the battle over the fiscal cliff.

By Charley Blaine Dec 7, 2012 12:54PM

The fiscal cliff sounds like a nightmare. But it comes with real numbers that have real impacts on the lives of most Americans. Here's an in-depth look at them:Fiscal cliff/MSN graphicThe fiscal cliff started to affect business decisions this fall. That's why you saw small declines in manufacturing in Friday's jobs report, for example.

It appears to be a worry for consumers now. The University of Michigan's latest consumer sentiment survey shows confidence dropping to a four-month low. That suggests households are concerned about a potentially sharp fall in their after-tax incomes.

The CBO data suggests they might want to be concerned.

The CBO estimates suggest the 20% of households with the lowest incomes might see their taxes rise by $412.

If you're in the middle 20% of income levels -- between $39,791 and $64,484 -- the average increase would be $1,984. If you're in the top 20% -- $108,267 or above -- the CBO is estimating an average increase of $14,173.

If you're in the top 1% -- with income above $506,210 -- the average increase might be about $120,500.

 

The threat of the cliff is the result of Congress' inability in 2011 to come up with a package that would satisfy everyone. It came after threats of a government shutdown, a downgrade of U.S. debt by Standard & Poor's and a short, intense panic in financial markets that sent the major stock market averages down.

The provisions of the cliff were part of a deal made by Congress in an August 2011 budget bill. It set up a so-called Super Committee of members of Congress and the Senate who were supposed to hammer out $1.2 trillion in spending cuts over 10 years. If they couldn't come up with a plan, then a mandatory combination of spending cuts and tax increases would kick

The Super Committee couldn't agree on a plan, with Democrats and Republicans essentially deciding to wait until after the 2012 election to make decisions.

The CBO sees the cliff cutting the federal deficit but also causing a recession, just as the economy is gaining some strength, that might not end until the end of 2013.


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1894Comments
Dec 7, 2012 2:52PM
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According to this chart, my husband and I are classified in the upper middle tax bracket.  That explains why we have a small house, old cars and shop at Walmart for our clothes, food and household items.  WE already pay enough in taxes!! Why don't you make those able bodied idiots who have 20 kids and live off welfare, get jobs and start paying taxes?!  I'm tired of paying for people to sit around, while I work my tail off and pay more and more damn taxes!  ENOUGH, ENOUGH ENOUGH!!!!  When will this government pull their heads out and LEARN? 
Dec 7, 2012 2:18PM
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If you believe the fed gov is wasteful and inefficient and spends too much, the last thing you should want to do is send them more money.  Let them prove they are capable of being good stewards of tax dollars before we send them any more.

On the other hand, if you believe more taxes are the answer, you obviously also believe the gov doesn't spend too much.  In that case, feel free to write them a check and leave the rest of us alone.

Dec 7, 2012 2:35PM
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How much of this money will we continue to send to foreign countries that hate us?
Dec 7, 2012 2:58PM
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Warren Buffett, in a recent interview with CNBC,offers one of the best
quotes about the debt ceiling ...
"I could end the deficit in 5 minutes," he told CNBC. "You just pass a law
that says that any time there is a deficit of more than 3% of GDP, all
sitting members of Congress are ineligible for re-election."  The 26th
amendment (granting the right to vote for 18 year-olds) took only 3 months
and 8 days to be ratified! Why?  Simple! The people demanded it.  That was
in 1971 - before computers, e-mail, cell phones, etc.
Of the 27 amendments to the Constitution, seven (7) took one (1) year or
less to become the law of the land - all because of public pressure. Warren
Buffet is asking each addressee to forward this email to a minimum of twenty
people on their address list; in turn ask each of those to do likewise. In
three days, most people in The United States of America will have the
message.
This is one idea that really should be passed around.  Congressional Reform
Act of 2012
1. No Tenure/No Pension
   A Congressman/woman collects a salary while in office and receives no pay
when they're out of office.
2. Congress (past, present & future) participates in Social Security.
   All funds in the Congressional retirement fund move to the Social
Security system immediately. All future funds flow into the Social Security
   system,and Congress participates with the American people. It may not be
used for any other purpose.
3. Congress can purchase their own retirement plan, just as all Americans
do.
4. Congress will no longer vote themselves a pay raise. Congressional pay
will rise by the lower of CPI or 3%.
5. Congress loses their current health care system and participates in the
same health care system as the American people.
6. Congress must equally abide by all laws they impose on the American
people.
7. All contracts with past and present Congressmen/women are void effective
12/1/12. The American people did not make this contract with
    Congressmen/women. Congress made all these contracts for themselves.
Serving in Congress is an honor, not a career.

The Founding Fathers envisioned citizen legislators, so ours should serve
their term(s), then go home and back to work. If each person contacts a
minimum of twenty people then it will only take three days for most people
(in the U.S. ) to receive the message. Don't you think it's time ?
THIS IS HOW YOU FIX CONGRESS!

Dec 7, 2012 2:42PM
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elimate all deductions, everything and charge a flat across the board 15% to everyone and all corporations on any profits made.. NO looppholes or gimmicks for anyone.. Make the tax code simple so one page will do it.

 

Dec 7, 2012 2:41PM
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Welcome to Communist obama's America. Thanks to all who voted for him.
Dec 7, 2012 2:39PM
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Let the senate/congress get rid of some staffers who make huge salaries and also let other gov agencies cut the fat from their own staffers and operate within their budgets!

Now that would bring back a LOT of money!

Keep the taxes off of citizens

Dec 7, 2012 2:51PM
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WHAT ABOUT OBAMA'S PROMISE TO NOT RAISE TAXES FOR THOSE UNDER 250K PER YEAR? FULL OF CRAP POLITICIANS AXE THEM ALL!!!!
Dec 7, 2012 2:37PM
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I guess what people don't realize is that soocialism may make the rich a little less rich, but it also makes those on the low end, poorer.
Dec 7, 2012 2:50PM
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Wow.....I am SO happy our President isn't going to raise the taxes of the middle class.....only the rich....ohhhh....wait.... It looks like they are....in fact generating FIVE times the amount of Revenue from the middle class compared to the rich....tip of the day.....buy Kool- Aid stock.....1/2 of the country has been drinking it since 2008......
Dec 7, 2012 2:34PM
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We're over the cliff already, it doesn't matter. The end result of Obamunism is going to be economic calamity no matter what happens now.
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If I was as ineffective at my work as the politicians are, I'd get my "walking papers" right away.  Vote against every incumbent.
Dec 7, 2012 2:36PM
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So here I am already at poverty level so I guess the next step is prison if I can't pay higher taxes? 
Dec 7, 2012 2:42PM
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It would not hit my wallet..I be hitting the Welfare like the rest of these people..Oh and its Tax free,Free Medical,Free housing allowance,Have more babies to get more money and a nice long vacation to boot..Sound like a game plan to me..haha
Dec 7, 2012 2:45PM
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We must punish people who work hard and are successful.  Gimme gimme I want more, I am a lazy piece of dog do do demonrat.
Dec 7, 2012 2:43PM
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This will adversely affect the demonrats as well, however, they are dumb enough to believe whatever oballsack says...

Dec 7, 2012 2:38PM
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How sad it is that the people elected to look out for us are more interested in taking care of themselves and their friends.They failed to remember what the majority of the nation voted on this past November.  The people want the rich to pay more!  If they fail to solve the issues remember their names come election time. It won't hurt their financial situation to lose their cushy jobs and benefits.
Dec 7, 2012 2:34PM
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More lies they will Skew the numbers so it will lok good for them this is just another lie to scare everybody heck if we go over let's all march on Washington and give them something they don't want Government does it to us all the time so remember Washington Pay Backs are a mother !
Dec 7, 2012 3:07PM
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I'm glad I can honestly tell my grandchildren that I didn't vote for this administration that is so obsessed with punishing hardwork.   We need the 9-9-9 plan that Herman Cain proposed.     My definition of "FAIR" is far different than the President's.     9% of middle income is far less than 9% of high income, but it is FAIR if all pay the same percentage.     Simple MATH is a foreign language to Democrats.    DEMs are all for taking from the successful and give to the lazy.    There are some that need help, but the majority are just plain BUMS
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