Have you watched or read the news lately? If you have, I’m sure you have heard the words: Fiscal Cliff, Bush-era tax cuts, Alternative Minimum Tax, Social Security tax, Debt Ceiling, etc.
I’m not an economist, but I have been reading all that I can to find out what this means to me and my family. I must say that the prospects are frightening, to say the least. Here is what I have seen from various news sources:
- If Bush-era tax cuts expire, the average impact to the normal family will be $3,500. Here is a calculator to see how it will affect your family.
- If the Alternative Minimum Tax is not patched, the average impact to the normal family will be anywhere from $2,700 to $4,000, based on different websites I’ve read. Here is a good explanation of the Alternative Minimum Tax. This would actually be retroactive to 2012 if it is not patched and might delay filing taxes. Also, remember that this was not withheld from your paycheck, so it may make the difference between getting a refund and owing.
- The Social Security tax holiday will be ending in 2013, and that will mean an increase of 2% taken out of your paycheck.
- Debt Ceiling – It has been reported that we may hit the debt ceiling by New Year’s Eve. That would affect many things, including: Social Security payments, healthcare paid for by the government (Medicare), etc.
Remember, I am not an economist nor a tax person. I am just a concerned citizen who would like to see the people elected to office do the job they are paid to do. Many professions require their workers to stay on the job until the work is done. Our elected officials did not do this. They left and went on Christmas vacation while leaving their constituents wondering about how all of this is going to affect them. As I add up the totals above, I see that my taxes will likely increase by $7,000 – $8,000 dollars per year, and I think many of you may see the same increases.
How will these extra taxes affect your spending? Will you be able to keep up on bills and groceries? This doesn’t even include the farm bill that needs to be addressed… Have you heard about the potential increase of milk prices? This is another antiquated bill, like the Alternative Minimum Tax, that Congress just keeps patching rather than actually fixing. Evidently, if the farm bill is not passed, a gallon of milk may increase by $2.00 or actually double its current price, depending on what news outlet is reporting about it. That is crazy!
Congress needs to roll up their sleeves and fix this mess before we head back to a recession or even depression. Because if the above is not fixed, many jobs will be lost, and we will head right back to where we were just a few years ago. Or worse…