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 9, 2012 6:46PM
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$32 billion defense spending cuts in the $700 billion defense budget is a 04.5% drop in the defense budget.
Dec 9, 2012 6:41PM
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when are Americans going to take back their country? no more taxes let the politicians ( who work for us ) make the money they are worth!!!  and have the same insurance the rest of us have. the kind that rape us in premiums and co-pays ( are you listening Blue Cross ?  they take more and more and pay out less and less !  Americans... STOP paying taxes, until it is fair for all. why do politicians make so much any way? what do they do? why so many ? lots of questions...  get rid of illegals already ! make welfare recipients get fixed so they cant  keep having babies that hard working people have to take care of so they can go out and get knocked up by another loser ! in the end we all lose !
Dec 9, 2012 6:29PM
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For the large federal income taxes we american pay each week from our paychecks what do we get?   NOTHING!!!!!!!  Atleast from state taxes our children attend public schools and drive on state roads.  The federal government is an out of control spending machine and tax monster.  Why do we even need a federal government?  Every state should leave the fed and be independent.
Dec 9, 2012 6:10PM
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If Karl Marx could see the Obama-Nation that is happening in America he would be grinning from ear to ear....I'm a Vietnam Vet who thought my service to my country would, in my own small way, prevent this from happening....When is the "Revolt" because I don't want to miss it !!!! 
Dec 9, 2012 5:36PM
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My thought is that why even bother trying to fix the economy. It seems we just keep digging that hole deeper. So because the government didn't do their jobs. We all get to pay much higher taxes in 2013 - and it all starts on January 1. I now see more lay-offs and more economic problems ahead.

Dec 9, 2012 5:30PM
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p.s. You will be paying for Obamacare on SURCHARGES for restaurants, and other businesses.
Full time workers will be downgraded to part time
People will downgrade their pay scales to just below 250,000.   Which is NOT RICH in major cities, then they will be better off.
Class warfare was a stupid idea on the part of the democrats, devised by RICH democrats, who already have their money tucked away.    What a iie that was bought by ignorants and the white guilt crowd.    
It will cost you more than the above chart even shows.    Small businesses CAN'T operate with this model.
Dec 9, 2012 5:28PM
Dec 9, 2012 5:26PM
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lets go over the cliff the alternitive is to give obama more money to give to the unions who earn  about 1 third of what they are paid and  the recipiants who dont earn any thing and oh yea, his cronnies  who donated money to lie hiswat into the whitehouse    why did he not disclaim 'dreams of his real father'?
Dec 9, 2012 4:12PM
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I kept telling you voters to vote in a complete new party and get rid of the Repulics/Demos!
Dec 9, 2012 3:15PM
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The increases and decreases are not extraordinary .You have 500 mil. in tax increases and 160 mil. in spending cuts. The debt burden is in the trillions and continuing to grow .This  is not a cliff. Bring it on! 

Dec 9, 2012 3:13PM
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I truly believe the comment someone made on the results of the election;  Romney/Ryan said; "Elect us and we'll put people back to work".  51% said; "Screw that!"
Dec 9, 2012 3:09PM
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In order to comply with the new tax increases I will have to lay off all of my minimum wage workers. of coarse they will get unemployment and a full range of benefits that I don't give them because I am too greedy. I will have to cut salaries to pay  for my next raise and tax increases. I have to maintain my standard of luxury, let the bottom feeders do without!!
Dec 9, 2012 3:08PM
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people we cannot blame this on the bottom tier of people, they suffer generations of oppression, marginalization, discrimination etc...they live in poverty...don't you get it?  I'm upper middle class and yes this tax rate will hurt me, but what about the cream at the top.  Lets tax the rich and leave the middle class and the working poor alone.  The perception of people sitting around is just that...an assumption made by ignorant people. Viva Obama! as my republican conservative friend says!
Dec 9, 2012 2:46PM
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if we go off the cliff some of us would have to stop smoking or give up stabucks or cut the cable. how could we survive as a nation !!!!!!! going off the cliff could lead to a balanced budget OMG!!!!!!! what horific event will be next, not starting wars in other countries just to support our defense contractors. If we are not careful it could even lead to peace OMG!!!!!!
Dec 9, 2012 2:03PM
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The thief's in Washington who have mis-managed our tax dollares for the past 50 years should be ashamed of themselves for even asking for morte taxes from the American People, if they did things abover board, they could  give people money back each year..
Dec 9, 2012 1:48PM
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I am so tiered of the rich capital politics effecting what is right for all Americans, in this move towards fiscal equality. Why not tax the rich equally as the middle class? It will not hurt them, and their deep political pocket interest, stay out of the moral economic equality, and balance that’s right, and also effecting the separation of power and the votes of moral justice of economic prosperity. You have enough million dollar homes, BMV’s, diamond rings, and your rich little toys you spend millions on. The real fact is the middle class gets poorer, and the rich get richer off the backs of use at lower pay.  Your profits will still be there, your nice comfortable lives will not be so affected, and its time you pay your share, and stay out of the politic. You influence media that you own, you affect pay to the workforce, to save your profit margin to dictate your tax right offs, you affect state, and federal interest with your political contributions, and to make things worse you outsource the high paying jobs overseas, and leave the scraps of lower paying jobs like retail in the US. Your arrogance even goes as far as saying you own the US and even the government. Enough is enough, and start doing more than what you think is ok. You may all kinds of reasons that you are giving your share but its more towards protecting your deep pockets, and wallets.

Dec 9, 2012 1:24PM
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Progressives get the best of both worlds.  They want to raise taxes on the middle class but don't want to take the blame.  Their solution?  Make NO deal and force us over the cliff.  They get their taxes and republicans get blamed.

 

It's in democrats best interest to have as many poor as possible, yet people are surprised we have a record number below the poverty line under their leadership.  DUH!

Dec 9, 2012 1:23PM
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You political jerks start paying your fair share instead of voting for more raises for yourselves? I live on medicare, a 1.7% increase for the coming year is a slap in the face to us older citizens. Fuel prices alone have increased the cost of living to be above the aforementioned 1.7 increase. You political morons are going to force your older citizens to go on Welfare which is already screwed up because of all of the people that are abusing the welfare system! Wise up and start checking on  and cut the Welfare checks going to illegal recipients. JUST KEEP YOUR HANDS OFF OF OUR SSI THAT WE HAVE WORKED TO PAY AND NOW NEED IT TO LIVE ON. Obamaeconomy is totally wrong. Our America is going in the toilet and he is going to flush it!
Dec 9, 2012 12:52PM
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All I can say is all who voted for Obama will soon get what you deserve! No way a socialist renegade like him should ever have the keys to this country that was built on hard working people. The land of the free really took on a new meaning with the election of this dictater. You can't vote foolishly, then complain about what you get. There is nothing right with this guy!
Dec 9, 2012 12:39PM
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You know what?  I would like to have a crack at that budget.  I bet I could balance it with two years.  No kidding.
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