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 3:49PM
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You can thank our STUBBORN REPUBLICAN CONGRESS for NOT working with our president if we go over the fiscal cliff. These past tax breaks was meant to help the MIDDLE CLASS and NOT THE WEALTHY. The wealthy can afford higher taxes and still be able to buy a loaf of bread  & bottle of wine (even the expensive kind) I'm sure. PATHETIC!!!!
Dec 7, 2012 3:49PM
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why can't they take a pay cut? My hubby works for our county and had to take a pay cut so what makes them so diffrent.
Dec 7, 2012 3:49PM
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Nothing infuriates me more than seeing an individual come in to the bank that I work at and cash a tax refund check for $7-8K+ ...and they have not contributed to anything in taxes for the year. I wish someone could explain to me how you can be "refunded" more than you contributed.  Think of how much would still remain in the coffers if that alone was reformed.  You can't get back more than you put in....simple as that!

Dec 7, 2012 3:48PM
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I can tell you all about a fiscal cliff...my family is going over it as we speak.  For over a year my husband has been looking for week 4 times a week, no one even has called him back..why??  He is over 50 years old for one!  Yes, elder discrimination is alive and well....so no more unemployment after today....I am disabled thru no fault of my own (injured on the job 9 years ago) so we will be living on 1000 a month.....Entitled??? NO....we have each worked since we were 14 years old....paying into the system.  How about reeling in the war machine and monies to support other countries and trying to fix our own country??  I believe the Civilian Conservation Corps needs to be brought back and fix our infrastructure!  We are not a democratic nation , we are a capitalistic nation.
Dec 7, 2012 3:48PM
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THIS IS WHAT YOU STUPID DEMOCRATS WANTED NOW LIVE WITH IT.
Dec 7, 2012 3:47PM
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I think it's almost better not to make over $108,267. Bring on the cliff, if people have to spend more in taxes then maybe we as a nation will see the need to cut out of controll government spending.
Dec 7, 2012 3:47PM
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I think people should be embarrassed to be aligned with the Republican Party. Are the top 2% so powerful that they control one half of our complete democratic system? We should send John Daily in to referee. I think we're in trouble.

Dec 7, 2012 3:47PM
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What does the Bible say about money: Jesus says,you can't serve two masters,both God and money,you will love one,and hate the other.Yet the GOP seek to do both,they want to serve money by maintaining tax breaks for the rich,so that it trickles down to the poor,which the Religious Right believes would please Jesus,who said he came to preach his Gospel to the poor-but that's serving two masters,both God and money,disobeying Jesus.There's a better,more surer way,help the poor directly,by not cutting Entitlements while giving tax breaks to the rich. Christians not only have to do what is right,but the appearance of what is right is just as important to set a good example for the world to follow.
Dec 7, 2012 3:47PM
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It's not that I don't want to help the helpless or less fortunate than me------------But I'll be damned if I want to

 

help the Clueless//////   If you can walk and talk get a job and don't tell me there are none to be found/////////

 

Our small town has about 20,000 people living here and yesterday I went into 3 local stores with help

 

wanted signs in the window///////////There should be no signs in windows for more than 15 minutes//////

 

Get a job clueless and help out society/////////////////////

Dec 7, 2012 3:47PM
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So, let me get this straight, if I make $108,266 I would pay $3,540 more , but if I make $108,267, just $1 more-- I will have to pay $14,173 more, over $1,000 more per month and 4x as much as the next lower bracket?  We do not have that kind of money laying around...wait, we would if we didn't have to pay a $2,400 mortgage payment when my house is only worth $180,000 and I cannot refinance because I'm under water and I've owned since 2004, maybe we could!  We live paycheck to paycheck like a lot of other people.  I do not shop at expensive stores, I shop at Kohls and outlet stores, Walmart and Meijer for groceries, I cannot afford to shop at Jewel or Dominicks, I wait for sales and use coupons.  If this happens, we will not have any extra money each month after bills.  Such BS.  Just because you make over $100,000 doesn't mean you're rich by any means.  I live in a small 1,700 square foot home in a middle class neighborhood.

Dec 7, 2012 3:46PM
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Should have made the Obama fix this BEFORE the election -- worthless just worthless
Dec 7, 2012 3:46PM
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An across the board tax percentage for everyone, with no deductions, is the only fair and controllable option.   If corporate America and our wealthy paid their fair share of the taxes, the rate would be incredibly low for everyone......
Dec 7, 2012 3:46PM
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This is what we got out the last four years, now you give him another four years, to bankrupt America ! ! ! !

 

 

Dec 7, 2012 3:46PM
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Maybe the Muslim Brotherhood will bail him out along with the Union Brotherhood ....
Dec 7, 2012 3:45PM
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who the heck is doing the math here??

 

" $108,267 or above -- the CBO is estimating an average increase of $14,173"     13%????? if THAT is real its time to storm the castle and get out the tar and feathers

 

 

Dec 7, 2012 3:45PM
Dec 7, 2012 3:45PM
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"I still don't understand why people voted for the incumbent president (can't force myself to say his name) knowing what he and Congress wanted to do to taxes --- and then compalin when their taxes go up!"

Your President dosnt want to raise taxes on the the middle class The republican party is holding the middle class hostage for unpopular spending cuts and increases. Trickel down economics dosnt work it is not 1986 and we now have a world economy. Unpopular things need to happen with our tax code, workers are taxed more then capital. The one percent that live on dividends pay 14% I pay 28% not fair and ballenced IMHO. Since we are now a consumer based economy we need a consumer based tax system that eliminates income and corporate tax system. If we continue with this system the ultra rich and big buisness will continue to shape our tax system for their benafit while the rest of the working middle pay for it. If the tax system stays the same we will all have to pay more taxes no matter who is in office it is our reality and our future. If congress continues to not perform they must go, they are elected to make decisions and compromise doing nothing and recieveing a check and life time benafits is unacceptible.

Dec 7, 2012 3:44PM
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So Obama wants to pay for indiscretions of the past with money from those that can actually afford it by taxing the Top. You folks want to blame Obama becuase the Republican's protecting the TOP refuse to budge. Pres, wants to help us all, Republican's are holding allllll of us hostage for TOP earners. Man yall must not know what surplus was or the last time we had it. It was when the TOP paid taxes they could afford. He's performing cuts to Medicare, reducing costs by innovating. Forget social aid, someone with 20 kids as someone mentioned may need to stay home so one of those kids isn't left alone to have their 20. Why are all you middle and low class folks against the man who wants to help you but is bested by those favoring people that look away from you? Come on Man!
Dec 7, 2012 3:44PM
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Well, that just makes it a perfect fricken week....yesterday i got my property taxes, and today i'm reading that my income taxes will be going up if we go over cliff....So, if the fricken gov't does get all this money they think is out there, what stupid bridge are they going to build with it?
Dec 7, 2012 3:44PM
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I am screwed either way....my wife and I will make this year and next around 190K....If I am going to have to pay....everyone else should also.....Let's do a Thelma and Louise....take er off the cliff.....
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