Monday, October 1, 2012

US Households Face $3,446 Tax Increase From Fiscal Cliff

 

U.S. households are facing an average tax increase of $3,446 in 2013 if Congress doesn’t avert the so- called fiscal cliff, the nonpartisan Tax Policy Center said in a study released today.

The top 1 percent of households face some of the largest tax increases in 2013 and would see their after-tax incomes fall by 10.5 percent if Congress does nothing. That would translate to an average tax increase of $120,537 for that group.

A typical middle-income household earning between about $40,000 and $60,000 would face a tax increase of about $2,000.

After the Nov. 6 election, Congress is scheduled to return to Washington to debate the automatic spending cuts and tax increases starting in January unless lawmakers act. For calendar year 2013, taxes would increase by $536 billion, or about 20 percent.

“This is a very large tax increase,” Donald Marron, the center’s director, told reporters in Washington today.

If Congress does nothing, tax rates on income, capital gains, dividends and estates would increase, and the alternative minimum tax would spread to 21.7 million households, up from 4 million this year.

The top statutory tax rate on ordinary income would reach 39.6 percent, up from 35 percent, and the top rate on capital gains would be 23.8 percent, up from 15 percent. A 2 percentage point payroll tax cut is set to expire at the end of 2012.

More @ Newsmax

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