What's in US fiscal cliff and who'd pay how much

Richard Durbin
Richard Durbin

Senate Majority Whip Richard Durbin of Ill., pauses while speaking to the reporters on Capitol Hill Tuesday in Washington, as the lame duck 112th Congress returned. (AP Photo/Alex Brandon)

Published: Tuesday, November 13, 2012 at 7:26 p.m.
Last Modified: Tuesday, November 13, 2012 at 7:26 p.m.

American consumers and businesses will pay much higher taxes next year if a package of tax increases and spending cuts known as the "fiscal cliff" takes effect as scheduled Jan. 1.

The nonpartisan Congressional Budget Office says the measures would push the economy into recession and drive the unemployment rate to 9.1 percent next year. The rate is now 7.9 percent.

Below are the main elements. The estimated dollar figures are for calendar year 2013:

Amount, in billions

Higher taxes on income below $250,000, higher estate taxes, alternative minimum tax. $279

Higher taxes on income above $250,000. 52

Expiration of Social Security tax cut. 115

Expiration of temporary tax breaks for businesses and individuals. 110

Expiration of extended unemployment benefits. 30

Defense spending cuts. 32

Across-the-board cuts to education, health, law enforcement, other programs. 53

Total 671

Source: CBO, Tax Policy Center

The tax increases wouldn't affect everyone equally, though all taxpayers would pay more. Here are the average increases for people at different income levels:

Income level Tax increase

Lowest 20% ($20,113 or less) $412

Low-middle 20% ($20,114 - $39,790) 1,231

Middle 20% ($39,791 - $64,484) 1,984

Upper-middle 20% ($64,485 - $108,266) 3,540

Highest 20% ($108,267 and above) 14,173

Top 1% ($506,210 and above) 120,537

Source: Tax Policy Center

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