Wednesday, December 12, 2012
If all current tax rates are allowed to expire,the impact for 2013 alone will be $388 billion in new revenue,but would,according to Romer and most economists,thwart our fragile recovery and induce a new,deep recession.
I was astounded recently to hear someone say they believe the talk of a “fiscal cliff” is artificial and not a legitimate threat. There is an artificial component to it in that government created it,but the threat is legitimate,and not only will it impact everyone of us in one way or another,even if an agreement is reached in Washington,but the cumulative economic impact could be significant.
There are several components to the so-called “fiscal cliff,” some of which are less widely known than others. Most people are aware that the present six income brackets taxed at rates of 10 percent,15 percent,25 percent,28 percent,33 percent and 35 percent will expire,and revert to the pre-Bush era five income brackets taxed at rates of 15 percent,28 percent,31 percent,36 percent and 39.6 percent. Without some reconciliation in Congress,everyone,even those at poverty level,will see their taxes increase.
The marriage tax penalty will return. The tax code,before the 2001 EGTRA (Economic Growth and Tax Relief Reconciliation Act),required a husband and wife to pay more in taxes when they filed jointly than they would as single taxpayers. This will expire the end of the year as well. According to calculations from the tax publisher CCH,the marriage tax penalty translates to a nearly 17% increase in taxes for those married couples who file jointly,regardless of bracket.
Posted by giveusliberty1776 at 4:33 AM