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View Diary: House broken: How the GOP legislative machine turned into a doomsday device (176 comments)

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  •  "...fiscal crisis..." NOT! (3+ / 0-)
    Recommended by:
    MPociask, judyms9, Midwest Meg

    What will happen?  The Defense budget will be cut -- we want that don't we?

    The income tax for some will go up -- slightly -- for some.  Many will stilll be in that (dispised) 47% that pay no taxes.  The rich will pay 4.6% more income tax -- we want that don't we?  Whatever money is re channeled will be spent.  It's not going to vaporize.  It will just be spent on different things.

    The payroll tax rate will go back to normal -- big deal.  Makes Social Security and Medicare less able to be used as a threat by Teabaggers.

    The economy is not hyper-active like the '90's but it is not crashing either.  I live in a ski town.  There are no shortage of people spending lots of money skiing and buying beer and pizza and new clothes and $5.00 gas and nobody is bitching about it.  

    The "fiscal cliff" is just another Swine Flu, SARS,Avian Flu, Y2K, Mushroom Cloud, Debt Ceiling golem built from shadows of electronic songs singing along the internet like nano-whales feeding on nano-krill.

    If nothing happens today -- nothing will happen tomorrow either.

    •  Taxes will go up the most on the poor (0+ / 0-)

      47% pay little or no income tax due to a raft of deductions and credits that will be gone. Their income taxes will instantly shoot up when things like the Earned Income Tax Credit expire.

      •  Could you please give an example? (0+ / 0-)

        Use a single person earning $40,000 a year.  That's above average income in my town.

        Do the math and show us.....

        •  Math (1+ / 0-)
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          Gross: $40000
          Less personal exemption: -$3800
          Less standard deduction: -$5950
          Gives taxable income: $30250

          First $8700 taxed at 10%: $870
          Remainder taxed at 15%: $3232.50
          Total: $4102.50

          2013 after the cliff:

          Pre EGTRAA (first Bush tax cut) tax rates (tax year 2000):
          Personal exemption $2800
          Standard deduction $4400
          First $26250 taxed at 15%
          Remainder taxed at 28%

          The monetary values for all four items above will be indexed for inflation.  As far as I know, nothing done since 2000 has affected the personal exemption and standard deduction, and indeed both 2012 figures are 35% more than their 2000 equivalents.  

          Again as far as I know, the IRS has not published updated figures for personal exemption and standard deduction for 2013.  CCH, a tax research service, makes the estimate below.  Applying the same (admittedly rough) correction to the bracket limits gives

          Gross: $40000
          Less personal exemption: -$3900 (1.39x 2000 figure)
          Less standard deduction: -$6100 (also 1.39x 2000 figure)
          Gives taxable income: $30000

          First $36487.50 taxed at 15%: $4500 (36487.5 = 26250*1.39)

          Tax increase is $397.50, or 10% more than in 2012.

        •  Here's a calculator to show tax increases (0+ / 0-)

          A family of four with an income of $33,499 would pay $3,747 more if we go over the cliff. This will destroy families at the lower income range.

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