POLITICS

Calculating your tax burden if we go over the cliff

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Politics,Beltway Confidential,Congress,Philip Klein,Taxes,Fiscal Cliff

This past weekend, the Washington Examiner ran an editorial explaining how going over the “fiscal cliff” would affect certain types of taxpayers.

For instance, we imagined Anne, a single mom making $40,000, and came up with:

What she pays now: $4,268

If we go over the fiscal cliff: $6,048

Difference: $1,780

In addition to increases in her income and payroll taxes, Anne will lose out because the per-child tax credit will fall from $1,000 to $500. For her, that’s a 42 percent tax increase.

Or, Stephen and Alexandra, a married couple with $100,000 in combined income and two kids:

What they pay now: $14,300

If we go over the fiscal cliff: $21,950

Difference: $7,650

Their tax bill goes up because they would not be allowed to claim the per-child tax credit and would have to pay the 26 percent Alternative Minimum Tax for part of their income. All told, their taxes would rise by $7,650 — more than 50 percent — to $21,950 per year.

Obviously, there are a lot of variables when it comes to people’s tax bills, and so these were just rough estimates of fictional people. But all of these estimates were derived from the Tax Foundation’s handy tax policy calculator. So if you want to get a general idea of how the fiscal cliff might affect you, check it out.

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