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Your own cliff: Pain for taxpayers without a fiscal deal

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Posted: Wednesday, December 26, 2012 10:56 pm

Fairbanks Daily News-Miner editorial

A lot of the news reporting and commentary about the “fiscal cliff” debacle in Washington centers on the politics: President Obama vs. House Speaker John Boehner, Republicans vs. Democrats.

Numbers in the billions are talked about.

However, it’s the much-smaller numbers, in the thousands, that will bring the individual discomfort unless our leaders can do in the next few days what they were elected to do: solve a problem.

The number that matters to many Americans is the dollar amount by which each individual taxpayer or family will see a tax bill increase or refund decrease in 2013.

Here are some of the potential taxpayer impacts, with the information source noted:

• People earning $20,000 to $30,000 per year would see an average total tax increase, including all elements affected by the fiscal cliff, of $1,215.

Here are the average total increases for other wage categories (Tax Policy Center of the Urban Institute and Brookings Institution):

$30,000 to $40,000 per year: $1,438

$40,000 to $50,000: $1,721

$50,000 to $75,000: $2,319

$75,000 to $100,000: $3,560

$100,000 to $200,000: $6,383

$200,000 to $500,000: $13,934

$500,000 to $1,000,000: $34,635

Above $1,000,000: $216,515

• People in the lowest one-fifth of income earners would see their federal tax rate rise 3.7 percent; in the second fifth, 4.1 percent; the third fifth, 3.8 percent; the fourth fifth, 4.2 percent, and the final, or top, fifth, 5.8 percent. (Tax Policy Center)

• About 26 million taxpayers will be moved into the alternative minimum tax system next year, which would raise their taxes by an average of $3,700. (The Associated Press)

• The Earned Income Tax Credit, Child Tax Credit, and Child and Dependent Care Tax Credit would return to pre-2001 levels without an agreement in Washington, meaning an estimated three-quarters of families with children seeing an additional tax impact of about $1,200. (Tax Policy Center)

Take a few minutes to estimate the impact on your finances. Then express yourself to Sen. Lisa Murkowski, Sen. Mark Begich, Rep. Don Young and President Obama.

Tell them to figure this out. Soon.

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