Art, re: the 2013 Fiscal Cliff
Re: (not extending the “Bush tax cuts”)----
“……the overall impact on individuals earning less than $500,000 is negligible,”
You and others believing the “Bush tax cuts” only benefited the wealthy might find the below site helpful and insightful. It provides a nifty tax calculator showing the fed income tax liability comparison if the current tax schedules are extended ( Fed Income and P/R), and what they would be if not. My summary below only reflects fed income taxes under two different scenarios.
As one can see, it dispels the myth that the 2001 “Bush tax cuts” only helped the wealthy. In scenario #1, the tax liability increases by $3,251 or 27% if not extended. Under scenario #2, the percentage increase is more stark (314%).
I submit, the overall impact of the “Bush tax cuts” on middle class Americans was significant, and will be very hurtful if not extended.
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interactive.taxfoundation.org 
scenario #1 - $100,000 salary, Married couple w/ 2 exemptions, standard deduction
goo.gl
…………………………….Current extended….Tax cuts Expire
salaries………………………$100,000………….$100,000
adjusted gross income………100,000………….$100,000
deductions / exemptions
..+ personal exemtption (2)…….7,800………..…….7,800
..+ standard deduction ...……...12,200…………....10,150
Taxable income…………………80,000…….……..82,050
Income tax liability………………11,858…………...15,109
….effective fed tax rate……………..12%.....................15%
Increase…………………………………………………3,251 (27% increase)
Scenario #2- $75,000 salary, married w/ 4 dependent children
goo.gl
…………………………….Current extended….Tax cuts Expire
salaries………………………..$75,000………….$75,000
adjusted gross income………..75,000………….$75,000
deductions / exemptions
..+ personal exemtption (4)……23,400………..…23,4000
..+ standard deduction ...……...12,200…………....10,150
Taxable income…………………39,400…….……..41,450
Regular tax……………………….5,018……………..6,218
..+ child tax credit (4)……………4,000………………2,000
Net Income tax liability………….1,018…………........4,218
….effective fed tax rate……………..1%..........................6%
Increase…………………………………………………3,200 (314% increase) |
