Taxmaggedon means families will pay $3,500 more, causing a recession
Jacquelyn Martin, Associated Press
SALT LAKE CITY — The average family will pay nearly $3,500 more in taxes in 2013 if 2001 tax cuts expire, which could plunge the country into another recession, according to a study from the Tax Policy Center on the upcoming fiscal cliff.
Nearly 90 percent of Americans would receive tax increases in the coming year if the nation topples off the cliff, according to the study.
The average tax burden for families in the U.S. would increase by 5 percent to $3,446.
The Tax Policy Center claims the increases affect taxes that influence behavior, like labor income, capital gains and dividends.
“If the president and Congress do not act, taxes would jump for most Americans and government spending would drop sharply,” the Tax Policy Center economists said in the report. “Those changes would reduce the federal deficit significantly in 2013 and subsequent years, slowing America's build-up of debt and reducing debt as a share of gross domestic product. But the resulting macroeconomic tightening could well push the country back into recession in 2013.”
If the Alternative Minimum Tax isn’t extended to 2013, the total tax liability in the country will increase 21 percent to $536 billion next year.
“Households with low incomes would be particularly affected by the expiration of tax credits expanded or created by the 2009 stimulus,” the study states.
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