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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1892Comments
Dec 7, 2012 2:51PM
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The lowest and the low-mid will not pay any tax increase as they don't pay any taxes in the first place.
Dec 7, 2012 2:50PM
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There is never a mention on a social security for the rich in their retirement years, you know those that don't need it? Do notice however that there is a mention of reducing our defense spending, but no mention of the amount of dollars that we can no longer afford to send overseas. If we cannot support our own defenses, how can we continue to support our enemies? Our defenses protect us from our enemies, and without backup I wouldn't want to go over there, where ever over there really is...
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 2:50PM
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The increaese on the top 1% wont even be close to that number because they'll continue to hide assets overseas, and defering income from overseas companies.  Unemployment is only linked to taxes because of corporate greed. Taxes have never made a company operate at a loss, go in to a larger loss or anything.  They only tax income after expenses have been paid.  The only reason this is linked to unemployment is because taxes take 35 cents from every dollar of profit they earn after a certain point and paying employees takes dollar for dollar from profit at every level.  It's cheaper to pay taxes than people and it always will be.
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the congress should not get a paid raise or the house that's what happens when they make the people pay more taxes if they give themselves a raise we should not pay taxes
Dec 7, 2012 2:48PM
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Not much a do about nothing since there is nothing you can do about it. Way too long the high end income earners are not paying their fair shake especially ones who use the loop holes. Nothing short of greed and soon there will be know one left to tax to subsidize their self appointed entitlements.
Dec 7, 2012 2:48PM
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maybe that's what we need,  to fall...so these idiots will finally realize that we are in dire need of some REAL leadership....someone we can trust not to be more into themselves then the american peolple
Dec 7, 2012 2:48PM
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SORRY I READ IT WRONG PLEASE IGNORE MY COMMENT ----------

Dec 7, 2012 2:47PM
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I'd pay at least $1,500 more per month, which is about what I'm paying for health care now for my family.  Let me see -- if I stopped paying health care and went on the public dole of Obama care -- I'd get my tax money back -- Right?
Dec 7, 2012 2:47PM
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That's a huge jump @ $108K - This awful situation was made so much worse with this awful president's spending habits.$14K is about 7 bucks MORE an HOUR is going to the wasteful government. 
Dec 7, 2012 2:46PM
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There is something very wrong with the picture above - every income level will get hit with a 20% increase in taxes, yet the wealthy who are making more than most of us can ever dream of in our lifetime, only get hit with a 1% increase ---  I would like to know why the wealthy get preferential treatment ????
Dec 7, 2012 2:45PM
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It is all a mess , As one Michael Jackson lyric "they don't really care about us" applies here.
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 2:45PM
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The fiscal cliff will punish everyone. If the Repos get their way the middle and lower class will pay the price, so let the fiscal cliff come or the tax hike for the rich. We would be better off then the Repo's plan.
Dec 7, 2012 2:44PM
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Looks good to melets jump off the cliff, less money for the gov. to spend....
Dec 7, 2012 2:43PM
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Higher taxes should be a good thing.  We'll all have to work harder in order to make more money. 

 

Isn't that how it's supposed to work?

Dec 7, 2012 2:43PM
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Terrific!  Take the cliff and jump.  If it is a disaster even Republican congressmen will have to act to correct the most egregious faults and they'll do it in less than 1 quarter.  The notion that the resulting changes from the "fiscal cliff"  (a name that can only be called scare propaganda) would somehow be forever and permanent is nonsense.  Remove the threat.  Let it be fact, then act!
Dec 7, 2012 2:43PM
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We need to boost revenue and cut expenses to get us out of this mess the republicon/corporations got us into. 
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...

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