Cliffhanger: How Far Will You Fall if There's No Deal in Washington?
It should be a drinking game for as much as we've heard the term 'fiscal cliff' since the polls closed in November, but what does it mean for your paycheck?
With hours left in 2012, it's still uncertain whether an agreement will be reached between Republicans and Democrats that would avoid having the country go over the dreaded "fiscal cliff" tax increases for just about everyone.
An impasse between congressional Republicans and the White House centers over just whose taxes will go up — with the president indicating those who make $400,000 or more should see their tax rates go up, while Republicans are pushing for no increases at all, or hikes for just those making more than $1 million. Spending cuts have also remained a sticking point between the two parties.
The hike will come at midnight as tax cuts from the Bush administration set in 2001 and 2003 will expire, increasing everyone's income tax rates. Another $110 billion in automatic cuts to domestic and military spending — the result of the 2011 standoff over raising the federal debt ceiling — will start to kick in, according to a report from CNN.
According to the nonpartisan Tax Policy Center, those in Wisconsin making between $20,000 and $40,000 could pay more than $1,200 in additional taxes if the national falls off the "fiscal cliff." Those making between $40,000 and $65,000 will pay almost $2,000 more. Upper-middle-class workers taking in almost $110,000 will see $3,500 less per year.
Patch's media partners at FOX6 News talked with Mordecai Lee, UW-Milwaukee Professor of Governmental Affairs, who said: “This is the total breakdown of what is the essence of politics. The essence of politics is solving problems — making it from ‘A’ to ‘B’ no matter what the obstacles are."
In addition if a deal is not reached by Tuesday, almost 40,000 unemployed in Wisconsin will see no income, as unemployment benefits will end for those who have received checks for more than 26 weeks.
Just what kind of affect would falling off the "fiscal cliff" have on your pocketbook? To find out, check out this tax calculator from the Tax Policy Center.