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How the ‘fiscal cliff’ will affect your taxes, in one chart

(Click on the image for a bigger version.)

Amid all the "fiscal cliff" negotiations, it's easy to lose sight of the actual impact that various tax proposals will have on Americans.

The graph above summarizes the differences between various proposals on offer:

1) The first line shows how families would be affected if the country went over the fiscal cliff. 

2) The White House proposal, for our purposes, is their 2013 budget, which brings back Clinton-era rates for high earners and caps deductions for people in top tax brackets, among other changes.

3) The Senate Democrats' plan is the bill passed earlier this year permanently extending the Bush tax cuts for income under $250,000; the plan doesn't patch the Alternative Minimum Tax, which leads to tax hikes for some middle-class families.

4) There's a proposal for a $25,000 cap on deduction, which is known to be favored by some House Republicans involved in fiscal cliff talks.

5) The last row shows the effects of the tax increase in the Simpson-Bowles deficit plan.

Together, these represent the four likeliest avenues for tax-based deficit reduction in the next month or two. For comparison, I also threw in the effects of the fiscal cliff, which are much larger than any other plan on the table.



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Suzy Khimm · December 14, 2012

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