December 22, 2012

Tax bite won't feel too bad – at first

If we go over the 'fiscal cliff,' your paychecks won't feel the full impact for a few weeks into 2013.

By ANDREW TAYLOR The Associated Press

(Continued from page 1)

Today's poll: "Fiscal cliff"

Which party bears more responsibility for the ‘fiscal cliff’ stalemate in Washington?

Democrats

Republicans

Equally responsible

View Results

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Many Republicans revolted and Boehner, R-Ohio, shelved the bill, sending lawmakers home for the Christmas holiday and leaving the outcome of talks in doubt as the new year approaches.

If Congress and the White House cannot reach a deal, income tax rates would go up, estate taxes and investment taxes would increase and the alternative minimum tax would hit millions of middle-income people.

A temporary payroll tax cut that has benefited nearly every wage earner in 2011 and 2012 expires, costing the average family an additional $1,000 a year by itself.

In addition, dozens of other tax breaks for businesses and individuals that are routinely renewed each year already expired at the end of 2011.

Congress was expected to renew many of them by January, so taxpayers could still claim them on their 2012 tax returns.

If Congress doesn't act on those tax cuts, businesses would lose a popular tax credit for research and development as well as generous tax breaks for investing in new plants and equipment.

Individuals would lose federal tax breaks for paying local sales taxes, buying energy efficient appliances and using mass transit.

In all, taxes would go up by about $536 billion next year.

 

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Today's poll: "Fiscal cliff"

Which party bears more responsibility for the ‘fiscal cliff’ stalemate in Washington?

Democrats

Republicans

Equally responsible

View Results