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

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  •  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-)
      Recommended by:
      dfe

      2012:

      Gross: $40000
      Less personal exemption: -$3800
      Less standard deduction: -$5950
      Gives taxable income: $30250

      Tax:
      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

      Tax:
      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.

      http://www.neoseeker.com/...

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