On November 7th, while cleaning crews are still tidying up from election night parties, America's political class will be hurling themselves into another essential battle over government spending, taxes and debt. On January 2nd, 2013, absent some kind of budget deal, America will fall off the "fiscal cliff" and face a massive tax increase and across the board cuts in government spending. Like most crisis these days, its a creation of politicians.
A new study from the Brookings Institution's Tax Policy Center finds that the expiration of the Bush-ear tax cuts at the end of the year will hit Americans with a $500 billion tax hike. While liberal talking points suggest that only the wealthy received a tax cut under Bush, in fact every income group saw their taxes reduced. The rich got "more" tax cuts for the simple reason that they pay more in taxes. The expiration of the Bush tax cuts will hit everybody......
According to the study, almost 9 out of 10 households would see higher taxes. The economic impact is likely to be disastrous, as the economy is already teetering on the brink of recession.
90% of US Households Face Huge Tax Hike Next Year
Almost nine in 10 households would pay more next year if the economy absorbs all of the tax increases in the so-called "fiscal cliff," a think tank reported Monday.
The report from the Urban-Brookings Tax Policy Center found that people in the U.S. would owe the Treasury a total of $536 billion more in 2013 if the fiscal cliff were not averted, with the average household taking a hit of almost $3,500.
Report: Nine in 10 would pay more taxes after the ‘fiscal cliff’
The components of the fiscal cliff have different effects on households at different income levels.
o For most households, the two biggest increases would be the expiration of the temporary cut in Social Security taxes and the expiration of the 2001/2003 tax cuts.
o Households with low incomes would be particularly affected by the expiration of the credits expanded or created by the 2009 stimulus.
o Households at the highest income levels would be particularly affected by expiration of the 2001/2003 tax cuts that apply to upper income levels and by the new health reform taxes.
o Upper middle-income households would be particularly affected by the expiration of the AMT patch.
So, even poor families will get back $500 less, per child, than they otherwise would.
Increased tax benefits for families with children. EGTRRA doubled the child credit from $500 to $1,000, expanded its refundability, and increased the child and dependent care credit.
The marriage penalty goes up and the earned income tax credit starts going down more quickly than it used to.
Reduced marriage penalties. EGTRRA set both the standard deduction and the width of the 10 percent and 15 percent tax brackets for married couples filing joint income tax returns at twice those for single filers. It also raised the threshold at which the earned income tax credit (EITC) begins to phase out for married couples.
Expand the Earned Income Tax Credit (EITC) for Larger Families and Married Couples. The American Recovery and Reinvestment Tax Act of 2009 (ARRA) increased the EITC wage subsidy rate from 40 percent to 45 percent for families with three or more children and increased the start of the credit phaseout range for married couples filing joint tax returns to $5,000 more than that for single workers, up from $3,000 under previous law. (The threshold for couples would revert to that for other filers if the Bush-era tax cuts expire as scheduled.)
That increase will be cut.
Increase Refundability of the Child Tax Credit. Families can claim a child tax credit (CTC) of up to $1,000 per child under age 17. If the credit exceeds taxes owed, families can receive some or all of the balance as a refund, known as the additional child tax credit (ACTC). The ACTC is limited to 15 percent of earnings above a threshold—$12,550 in 2009 (indexed for inflation). ARRA lowered that threshold to an unindexed $3,000, making the ACTC available to more working parents and increasing its value for others. (The maximum credit would fall by half if the Bush-era tax cuts expire as scheduled.)
Impending Tax Increases
Federal taxes are scheduled to rise in 2013 for six reasons.3 First, most of the Bush-era tax cuts that were enacted in 2001 and 2003 and extended for an additional two years at the end of 2010 are again set to disappear. Second, some of the temporary tax cuts that were part of the American Recovery and Reinvestment Act of 2009 (ARRA) and also extended at the end of 2010 will expire. Third, Congress has not acted on dozens of short-term tax breaks that are regularly extended. Fourth, the payroll tax cut, always intended to be temporary, is set to expire after a two-year run. Fifth, new taxes enacted in 2010’s Affordable Care Act (ACA) will take effect in tax year 2013. Finally, the AMT “patch” that protects tens of millions of taxpayers from additional taxes expired at the end of 2011. Unless Congress extends the patch retroactively, many taxpayers will owe AMT on their 2012 tax returns (the tax returns that people will file in early 2013).
Originally posted by newcovenant
That's only if Romney wins he will reinstate the Bush tax cuts for the rich and raise taxes on the middle class.
Who's better for the country?
Originally posted by Hefficide
Brookings Institute PDF source
www.factcheck.org... claims that, not counting Social Security, which the government likes to call "off the books," The combined surplus for 1999 and 2000 was under $90 billion. Your number is 33 times that.
Clinton handed Bush a 3 trillion dollar surplus which he quickly burned through waging 2 wars,