Fiscal Cliff Tax Hikes Would Hit 90 Percent Of Americans, Companies, Government Agencies

1:00 PM, Nov 20, 2012   |    comments
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WASHINGTON (WUSA) -- Still no deal on the Fiscal Cliff. President Obama has  been signalling he believes a deal can be struck in time, but the President and congressional Republicans have only met once so far. The outlines of a deal have yet to take shape.

There's not a lot of time left: only about 41 days to stop the country from going over the Cliff.

Already, there are consequences for this brinkmanship politicking.
The WSJ has been reporting that companies are already scaling back investment plans at the fastest pace since the recession.

Companies aren't the only ones who could get slammed by a $600 billion package of spending cuts and tax hikes. Government agencies would see their budgets slashed.

The Pentagon would get hit hard, but sequestration would also mean fewer law enforcement types like FBI agents, border patrols, disease trackers, and prison guards

It could also hit YOUR bottom line extremely hard with a wave of tax hikes. The Tax Policy Center predicts that if we drop off the fiscal Cliff -- taxes will go up on 90 percent of Americans.

Let's take a look at this by income:

  • For people making up to $20,113 -- your taxes would rise by over $400.
  • If you make between $20,114 and $39,790 -- your taxes will climb next year by about $1200.
  • Make between $39,791 and $64,484? Your taxes will rise by almost $2000.
  • If you make between $64,485 and $108,266 -- expect a tax hike around $3500
  • Looking at incomes that range between $108,267 and $506,210 -- that tax group will pay about $8,639 more in taxes next year.

You also need to know that if you are a stock investor,  then you could get hit hard too. If the Bush-era tax cuts expire in the new year the tax rate on stock market profits -- the capital gains rates will JUMP to 20 percent from 15 percent.

Also, if you make $200,000 as an individual  -- or $250,000 for a household -- expect to pay an additional 3.8% "investment income tax." That will help defer the costs of President Obama's health care law. Basically, that boils down to a cap gains rate of almost 24 percent.

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