The fiscal cliff and you
Here's a quick way to understand the battle over the fiscal cliff.
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:
The 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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If we would just increase federal taxes to 20% of GDP (about 3.5%) and cut federal spending to 19% of GDP (about 6%). We could get a handle on this fiscal budget and create a surplus. Everyone needs to feel the pain though, everyone! The surplus needs to be used to pay down this debt. In 8-10 years we would be in very good shape. Everyone needs to make sacrifices for our children’s future. It is mature social responsibility that should set the precedent here.
Darlyn:
Your not the only one who has worked there **** off for what little you might have.
But I ask you. Way aren't you pissed that the super rich has been eating your lunch all along and you haven't complained one time about this?
Why is it your complaining about helping some of the people, when the rich doesn't want to give one bit of there millions of income toward paying there share?
Its about time you learn what's really going on here, your not the only one who would like to keep all the money they make, but the very well off get all kinds of tax breaks and if that doesn't work they send there money over seas, maybe if you don't like what's happening with your money, you should start investing in the Cayman Islands..
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