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.


More from MSN

1892Comments
Dec 7, 2012 4:37PM
avatar
Its funny how that 51 or so % believes that people who make more money don't deserve it... Envy is one of those sins. Taking the money away from the people who make more, the big business owners makes as much sense as banning turkeys on thanksgiving. if we take more from those businesses we cut our own throats; the hiring stops, their spending stops and we as a middle class lose, how is that going to prosper us. if we give the upper 2% the continued tax cut, they will hire more, spend more and maybe help get this country back on track. the ideology of " i'm owed" needs to stop and people should take some pride in earning their way. BUT with this administration, well they will just keep serving the Kool-aide. (but i'm just saying)
Dec 7, 2012 4:37PM
avatar
Republicans started all this mess in the first place.  Making up bills and laws as they went along just to suit their needs and not the needs of the American public.  The rich got greedy and that's what happened.  Make money in the USA then bank it in another country, pay no taxes.  While the rest of us use US banks and pay taxes when we buy stuff, pay taxes before we get our checks and then we pay taxes at the end of the year. Pay taxes on cars and homes because we don't have cash to buy out right.  How fair is that? How about we find tax loops for us little people.
Dec 7, 2012 4:36PM
avatar

Lest we forget, those tax increases in the table based on income level illustrate what Clinton imposed on all of us.  So what's the problem?  Let's all go over the cliff together.

Dec 7, 2012 4:36PM
avatar
I HOPE THE HELL THE CROOKS IN WASHINGTON STARTS PAYING THEIR TAXES INSTEAD OF SAYING THEY DID NOT THINK THEY WERE SUPPOSE TO LIKE THIS ****ING IDIOT WE NOW HAVE AS THE TREASURE SECRETARY.   IF ANYONE OF US WE WOULD BE SITTING IN ****ING JAIL FOR YEARS.
Dec 7, 2012 4:36PM
avatar
if the government wants to get more money they need to take a major pay cut and cut the retirement they recive in half im sure that would give them a great deal of income to pay the bills and give more to those who need it like schools, military, police,ect
Dec 7, 2012 4:36PM
avatar

We heading to Socialism-Communism where the elite people in the government will have everything, but nobody else. Government will control us personally thru the full instalment of the Obamacare in the near future. People who oppose to to government (democrats) will be thrown down form their seat, so the party will take care of the empty seat to rule their will. Please everybody wake up from this somnolence state and fight back..Zimba

Dec 7, 2012 4:35PM
avatar
I make under $15,000 a year. just making a house payment, property taxes and utilities pretty much takes all my money. I'd like to know where the $412 increase is going to come from. I guess I could give up eating.
Dec 7, 2012 4:35PM
avatar

Well lookey lookey here!  Alll that talk by Obama about taxing the rich is going to raise a whopping $52.  But just as I knew, we're going to hunt down and tax the snot out of those making under $250K household income to make up the bulk of the tax increase revenue.  And 52% of voters voted for Obama.  Nice.

And another thing, if you DON"T PAY FEDERAL INCOME TAXES, you shouldn't get to vote in federal elections!!!!

Dec 7, 2012 4:35PM
avatar
If you read the consittution it says if you are an American and you live and work in the United States of America you are not subject to a Federal Income Tax. So why are you paying taxes? Because you sign your name on the W2 tax withholding form. If that is not enough now you have to pay taxes on insurance. Unemployment, Socical Securty. What's left lets see Life Insurance,Workmens Compentsion Insuirance,Health Care Insurance. Socical Security Insurance if that is all you get than none of it is taxed. Thank You Uncle Sam you do have heart. But if your pension or other income is to high than taxes will be deducted from your Socical Securty Insurance.
Dec 7, 2012 4:34PM
avatar
Where in the hell is Obummer taking this great nation?  Will give you a clue, down the drain.  This muslim president wants to be a king and all the rest of us to be his serfs,  everyone sitting around waiting for their welfare check and food stamps if we are lucky enough to have these programs. 
Dec 7, 2012 4:34PM
avatar

I just assume to vote the whole bunch of liars out of office and start New ....Once a liar always a liar. They could only improve the way they lie. They steal our money and have the gall to waste it and Not on this country .  

Dec 7, 2012 4:34PM
avatar

The Replublican PUKES wont do anything but pass gas in washington unless its for their rich contributors who make over 500,000 per year.

They are to blame for TWO WARS, MILLIONS in AID to Foreign Governments whose citizens HATE the USA

IF WE CAN NOT TAKE CARE OF OUR FAMILY= AMERICANS AMERICANS AMERICANS AMERICANS WE THE PEOPLE DO NOT WANT TO TAKE CARE OF ANY FOREIGNERS,READ OUR LIPS OR YOUR FIRED

Dec 7, 2012 4:34PM
avatar
The middle class is just screwed anyway you look at it. This government will be the end of the good old USA as we know it. Welcome socialism folks, it on the horizon. Thanks all you Obama voters. You just sucked us into the sewer.
Dec 7, 2012 4:33PM
avatar
All these idiots blaming it all on the President. What about the idiot republicants and Boner, I mean Boehner? They are the ones forcing this whole thing. It was their stupid decision to come up with this fiscal cliff. Anybody who voted for a republican in congress deserves this mess. I cannot understand why so many people in this blog cannot understand this>
Dec 7, 2012 4:33PM
avatar

You have to ask yourself. Why the president doesn't like the USA? IMO he is increasingly

 stifling the USA progress. 

 

Dec 7, 2012 4:32PM
avatar
I think the folks on both sides of this issue and most everything else are actually on the same side using PR games to throw us off. I also think the same puppeteer is handling both major groups in  Congress and the WH and we are buy'n it. What will happen is that the phoney Republican Party will continue to balk and in January the phoney President and useless/racist Democrat Party will use an executive order to do what the Messiah wants. The Congress seems to let it all go that way so far. We are getting a seriously big screwin from them all and we have been over the edge for a long time now! Have a nice day.
Dec 7, 2012 4:32PM
avatar
so my goal will be to not make over $108,266. Talk about an economy killer. I will use every little deduction and loophole I can find.
Dec 7, 2012 4:32PM
avatar
Too bad this info didn't come out before the election...
Dec 7, 2012 4:31PM
avatar
I empathize with Darlynn.  I make what is considered a good salary, but drive a 10 yr old Ford, buy clothes mostly at thrift stores and buy all two-for-one stuff at the grocery.  Meanwhile I'm being constantly ripped off everywhere I turn... insurance companies especially, taxes, banks, plumbers... everybody has become a scam artist... fees and lies.  Things are very seriously wrong.  I'm about ready to bail out of this country, much as I hate to see it.  I know a guy who moved to Thailand... loves it and says to heck with the USA... nothing but a pain in the **** and a ripoff.
Dec 7, 2012 4:31PM
avatar

These debts and tax hikes are the results and consequences from the incompetent regime and leaders in office from January 20, 2001 – January 20, 2009, fighting the 41’st presidents lost battles. Guess who is paying his family’s war-bills now while laughing and counting their oily blood money over a Thanksgiving dinner together……

 

If Warren Buffet says that the way to recovery is to let the superrich (just like himself) pay at least as much as we do, 25-28% , well then that’s what we should do; but oh no, the Republicans want it to come from those who make less 100K with 2 - 3 kids and 4 jobs between 2 adults…

 

250 years ago there would have been a revolution, it is supposed to be a Government BY the people - FOR the people, not the people feeding already fat and rich politicians who are puppets by Wall Street.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.

Trending NOW

What’s this?

MARKET UPDATE

[BRIEFING.COM] The stock market ended the midweek session on a mixed note. Blue chip listings bolstered the Dow Jones Industrial Average (+0.4%) and S&P 500 (+0.3%), while the Russell 2000 (-0.4%) and Nasdaq Composite (-0.02%) underperformed.

Equity indices began the day in the red, but wasted no time regaining their flat lines. Small-cap stocks were not as fortunate as the Russell 2000 spent the day in the red.

Upon returning into positive territory, the key indices were ... More

MSN MONEY'S