U.S. Households Face Tax Increase From 2013 Fiscal Cliff

[Gerald]

A model home in Rancho Cucamonga, Ca.

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 a year would see a tax increase of about $2,000. The average federal tax rate, including all taxes, would reach 24.3 percent, up five percentage points.

After the Nov. 6 election, Congress is scheduled to return to Washington to debate the automatic spending cuts and tax increases that will start 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.

http://www.bloomberg.com/news/2012-1...cal-cliff.html


Note: 2012-10-01