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 2:42PM
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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 2:42PM
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This is terrible journalism. The author assumes absolutely nothing will happen and that just isn't going to be the case.  That is the problem with America, very little in depth reporting that gets to the truth....just a 15 second byte or chart that presents something that isn't going to happen.  The Fiscal Cliff is a made up crisis and is not real.  In the end the tax cuts for 98% of us will remain, the top 2% will pay more and there will be some spending cuts......will this hurt anybody, not really.
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 2:41PM
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Welcome to Communist obama's America. Thanks to all who voted for him.
Dec 7, 2012 2:40PM
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Dec 7, 2012 2:40PM
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looks like obammy is going to get his way afterall...
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 2:38PM
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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 2:37PM
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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 2:36PM
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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 2:35PM
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How much of this money will we continue to send to foreign countries that hate us?
Dec 7, 2012 2:34PM
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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.
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 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.

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