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'Fiscal cliff' will hit most taxpayers in the United States
Source:
nydailynews.com
- Nov 15, 2012
Spending cuts will also hit doctors who accept Medicare, people who get unemployment aid, defense contractors, air traffic controllers, national park rangers and companies that do research and development.
Everyone who pays income tax - and some who don't -will feel it.
So will doctors who accept Medicare, people who get unemployment aid, defense contractors, air traffic controllers, national park rangers and companies that do research and development.
The package of tax increases and spending cuts known as the "fiscal cliff" takes effect in January unless Congress passes a budget deal by then. The economy would be hit so hard that it would likely sink into recession in the first half of 2013, economists say.
And no matter who you are, it will be all but impossible to avoid the pain.
Middle income families would have to pay an average of about $2,000 more next year, the nonpartisan Tax Policy Center has calculated.
Up to 3.4 million jobs would be lost, the Congressional Budget Office estimates. The unemployment rate would reach 9.1 percent from the current 7.9 percent. Stocks could plunge. The nonpartisan CBO estimates the total cost of the cliff in 2013 at $671 billion.
Collectively, the tax increases would be the steepest to hit Americans in 60 years when measured as a percentage of the economy.
"There would be a huge shock effect to the U.S. economy," says Mark Vitner, an economist at Wells Fargo.
Most of the damage - roughly two-thirds - would come from the tax increases. But the spending cuts would cause pain, too.
The bleak scenario could push the White House and Congress to reach a deal before year's end. On Tuesday, Congress returns for a post-election session that could last through Dec. 31. At a minimum, analysts say some temporary compromise might be reached, allowing a final deal to be cut early next year.
READ MORE:
http://www.nydailynews.com/news/politics/fiscal-cliff-hit-taxpayers-article-1.1201087
Category: General Business
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