'Taxmageddon' could hurt child deduction, married couples

A large series of tax cuts, breaks and benefits, including deductions for children, will expire on Jan. 1, which could hurt a weak economy.

As a result of the increased tax burden, which some congressional aides are calling “Taxmageddon,” means $500 billion in higher taxes in 2013, Curtis Dubay, a senior policy analyst for the Heritage Foundation, told CBN News.

"A tax hike of that size for just one year is simply unprecedented," Dubay told CBN. "It's going to take an enormous chunk of the economy out of the hands of the businesses and people and families that earned the income and give it to Congress to spend."

Some of the tax cuts that will end include:

• Social Security payroll tax will return to 6.2 percent from the current 4.2 percent.

• Parents can only write off $500 per child rather than $1,000

• Married couples will now have to pay more taxes because the fix of the marriage penalty will expire.

• More middle-income families will be treated like the wealthy by the IRS and taxed much more due to an expiring patch on the Alternative Minimum Tax policy.

Federal Reserve Chairman Ben Bernanke said the tax hikes could cause problems in an already weak economy, according to CBN.

Not all experts see the tax hikes as a bad thing.

"Raising taxes in the short term and spending it, particularly taxes on the top end, will produce more jobs," Robert Borosage, founder and president of the Institute for America's Future, told CBN. "We have a lot of corporations and a lot of very wealthy people sitting on their money."

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