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 4:01PM
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Currently, at least 65% of legal immigration is by family sponsored(1.2 million+ each year). There is no limitation on citizen's parent immigration. After 5 years, most parents are legal to apply medicaid, SSI, and house assistant or nursing home.

The monthly cost from our tax money:

SSI: $700 +

House assistant: $800 +

Medicaid: $500 +

Nursing home: $5000 +

In 20 years (age 65 to 85), that can easily cost 1 million dollars of our tax money per person.

The problem is: the sponsor party may be rich and put the responsibility to our tax payer. Most of our retired workers can not have nursing home benefit from Medicare. It is not fare.

Solution: If an immigrant apply for welfare, his/her sponsor's income and networth should be counted until he/she earned at least 40 social security points.

Dec 7, 2012 4:01PM
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I WILL QUIT MY JOB BEFORE I GIVE OVOMIT MORE TAXES!!!!!!!!!!!! IT'S PURE B.S.  IT'S IS RAPING AMERICA AND CAN'T GET HIS DAMN SPENDING UNDER CONTROL.
Dec 7, 2012 4:00PM
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They had an article on here yesterday about the richest people in congress. just about all of them had a range of 50% to 1,000% increase in wealth during the recession from 2006-2010. how does that happen. these congress turds aren't going to pass anything until they see how much $$$$ they can make its all about the $$$ they don't care about the people that's why they are fighting so hard to not raise taxes for the rich because that's them. 
Dec 7, 2012 4:00PM
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How can you cut the Social Security payroll tax by $115 billion and not change benefits?

The 2% payroll tax was never even asked for by taxpayers.

 

Simple math eludes these people.

Raise the payroll tax back up to where is supports SS if it is so important to the american people.

Dec 7, 2012 4:00PM
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I really think that all of congress should be fired, then all new qualified people should be put into congress, to see if they can do a better job, if not start the progress over again, until they get it right.
Dec 7, 2012 3:59PM
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I didn't know war was this expensive.

 

I remember when they changed from physical food stamps to food stamp debit cards.  People paying in a grocery store with physical food stamps got a lot of ill will from other shoppers paying with money they worked for.  With the food stamp debit card, the other shoppers didn't know.

 

Still, I miss the physical food stamps because people would sell them to you in the supermarket parking lot for 50 cents on the dollar.  Now it's more difficult.  They have to use the food stamp debit card to buy steaks, then they sell you the steaks in the parking lot for 50 cents on the dollar.

 

 

Dec 7, 2012 3:59PM
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Wow!  Not only do I make less money now than before, but now I get to look forward to giving the government an EXTRA $2,000 that I DON'T HAVE!  I'm so sick of having to pay more while I watch our governemnt overspend on STUPID projects and fight amongst themselves like little babies.  I have a family to take care of and cannot continue having to clean up after our government.

 

Congratulations to all of you Obama voters . . . he's called 'The Bomb" for a reason!  All of you who voted for him just set hard-working families back even more.  I suspect more people on welfare after this.  But, hey, maybe that's the way to go.  Keep giving handouts to people who don't want to work and keep having babies.  That's the answer!

Dec 7, 2012 3:59PM
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Well, at least Obama's approval ratings are up!

Dec 7, 2012 3:59PM
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Last time I checked the budget shortfall for 2011 was a little more than 1 trillion.  So this would just barely eliminate about 65 percent of that, we would still need 35 percent or about 400 billion more in cuts to have a balanced budget. 

Now if we just raise taxes on those making over 250k as Obama would like that would create 52 billion in revenue this year, so that means we would still need to have about 950 billion in cuts somewhere. 

Let the fiscal cliff happen, let taxes go up and we cut and we get a balanced budget and start getting out of the red. 

Do we want a little growing pains now or a lot in about 15 years when the US becomes the next Greece.

Dec 7, 2012 3:57PM
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I'm not a Harvard Economist, but when I read the comments here, it makes me wonder if most of the people posting even read the paper or understand the tax proposals! 

 

A tax cut that Bush put into place is set to expire.  If it expires, the chart above shows what will happen.  I'm not sure why most comments blame Obama for that....

 

Obama is trying to push through a compromise that will have some people paying more taxes.  Some just a little more; some a fair amount more.  However...

 

Most Republican Senators / Representatives won't support his plan because it has the highest top 5% (those earning over $250) paying more than they think is fair.  The top 1% would pay the most (those in excess of $500K a year).  The majority of people would pay nothing more, so thank the Republicans who won't compromise for the increases on the chart above.

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Housing and healthcare are the two biggest financial drains when it comes to the cost of just plain living. We need government to provide for the national defense and protect our water, food and air from being poisoned. Why can't we end exclusionary zoning so you can live in a home of your own choosing on any residential lot that you can afford to buy? Why can't we recruit doctors who'd work for an hourly wage in government hospitals and clinics? We'd provide them with a free medical education including college and also give them malpractice immunity. This would eliminate the fee for service billing and insurance companies to process the claims. Anyone who likes medical capitalism as it now exists can feel free to continue with that. We also need a one child rule world wide to get the world population down to less than 2 billion. Then we could go to a two child rule just to maintain that sustainable level. Mandatory tube tying is better than war and misery that is sure to come if the population is left to grow on its own. It's more than trippled just in my life time from 2 billion to 7.5 billion. My ex sister in law just had her hip break and broke two bones in her wrist in the fall. She's just living on social security and is about 68 yrs old. Her daughter is taking care of her but man what a burden.
Dec 7, 2012 3:57PM
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It doesn't matter if you believe the Republicans take on this, or the Democrats take. The fact is simply this.  You MUST CUT your SPENDING in order to continue living at your current level........ PERIOD>
Dec 7, 2012 3:57PM
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WA and CO can carry CA with all that fat dope tax money then we will be ok..... maybe they can even send some bacon to detroit
Dec 7, 2012 3:56PM
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I am 67 yearss of age.  worked all my life.  Could not save then, cannot save now.

It does not matter who the president is.  He/she would still have to roll with the flow.

If the government thinks they can get more money from me, they are sadly mistaken.

I am no longer going to file taxes - Fed or State.

I am hereby claiming exempt status from our government laws, rules & regs.

 

FBI, CIA,  COME AND GET ME.     

Dec 7, 2012 3:56PM
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I thought this country was founded because of high taxes and other reasons. The taxes are getting way out of hand and need to be stopped.

How about a pay reduction for ALL Government officials to start? It used to be a PRIVILEGE to serve in Government, it wasn't all about money like it is now. There really are some ridicules salaries out there.

Trim the staff is another example

And how about the President cut out all the vacations the First Family take. They have had more vacation time to places I'll never get to see. They have taken more trips in 4 years than I have in 45.

A lot of the problem is the high salaries that are paid for the people who do the least. The lawyers and politicians are the ones making all the money, why else would they be there?

Dec 7, 2012 3:55PM
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Ok this is a load of horse poop!!! The United States Congress voted to steal from our Social Security not once but twice. That was done with no thought of what the Constitution of the united states says, go figure??? I am so tired of our government changing the conststution to fit what they think it should mean!! We need a man or woman that stands for We The People not sor what they think is best for us. They work for us not the other way around.

 

Dec 7, 2012 3:55PM
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I'm not for laying it all on the rich, nor am I for ANY tax increases for the low 40%, nor do I think that the middle class should escape completely.  I'd say that the tax burden should remain the same for the low 40% and that that the responsibility to make up that difference should be transferred to the wealthy.  After all, if you look at the numbers, it is obvious that the rich are not paying their fair share.

 

While we're at it.....  Why not look at a federal sales tax on all goods and services with NO exemptions INSTEAD of an income tax.  In this manner everyone would be taxed according to how well they live.  If a billionaire wants to live like a pauper, then he won't pay much tax.  Anybody know a billionaire who lives like that?  Neither do I.  But right now there are plenty of them who pay almost no tax at all.  NOT RIGHT!!!  The sales tax....with NO exemptiions... is the fairest possible way to tax. 

Dec 7, 2012 3:55PM
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Sadly, these figures DO NOT include the approximatley $2200.00 per year for Obamacare. HINDSIGHT IS WORTHLESS.
Dec 7, 2012 3:55PM
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If a rich man can afford a new mercedes or that new mansion with a swimming pool then I'm sure they can AFFORD to pay more in taxes.... REPUBLICANS ARE SO BLIND TO THIS!!!
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