Unresolved fiscal cliff could raise taxes for 90 percent of U.S. families

(CBS News) Monday marks the first day of the federal government's new fiscal year, but there is not much to celebrate because we are headed toward what's being called a fiscal cliff.

There were dire new warnings Monday about what will happen to American families unless Congress and the president reach a budget deal by December 31. That is the day that several tax cuts will expire, and big cuts in federal spending will take hold.

4 tax moves to gird for the "fiscal cliff"
What is the "fiscal cliff"? A Q&A

Tax experts said 90 percent of American families are facing what they will call "unprecedented tax increases."

According to the non-partisan Tax Policy Center, the U.S. is on the threshold of one of the largest tax increases in history, a tax hike that could average $3,500 for every American household.

Without actions from Congress, the report says taxes will go up next year by 20 percent, or $536 billion overall. It will hit Americans at every income level including those living below the poverty line. For a middle income family making $40,000 per year, the tax increase is $2,000.

The increases are so large because the nation's biggest tax cuts all expire three months from now on New Year's Day. They include the Bush-era federal income tax cuts, the payroll tax cut that lowered Social Security and Medicare taxes, and several remaining stimulus tax cuts. They all go away January 1 unless Congress and the president reach a deal on the budget.

Many economists are concerned that a tax increase of that size will shock the economy and trigger a recession by reducing the cash taxpayers have to spend. But now, Congress and the president have a firm price tag on what it costs if they don't reach a budget deal after the election.

[rider1956]

Thats not a cliff, its just a elevated path - closer to Providence.

[PaulStra]

Once all this awful stuff - the increased taxes on everyone - comes to pass - Do you think people will have a problem with the fact that we are still spending over 500 BILLION a year more than we take in? Or will still just keep blaming the other guy and saying the problem is that we didn't raise the taxes enough on someone else?

[Regur44]

If there are any real patriots left in this country they will vote out, with few exceptions, the entire current cast of characters in Washington. They are destroying this country! When H. Ross Perot ran in 1992 (and he got my vote) he warned of the fiscal calamity that was developing and at that time the debt was ONLY $4 trillion. Now, it is at $16 TRILLION and climbing and the continuing response is to "kick the can down the road" and, I guess, hope the problem goes away. And, bleeding the rich is not the answer since there is not even enough money there to fix this dilemma. Spending has to be cut and most, if not all, including the 47-51% people who pay NO federal income tax are going to have to contribute. This government and far too many of its inhabitants have been living beyond their means for decades and if there is no correction we will go over the fiscal cliff and it won't be a pretty site. The U.S. Government is the biggest business in the world and we've seen what happens when its run by a bunch of self serving politicians and their cronies.

[wizardlady]

Say what?????/

Is CBS trying to help give Robme something to talk about at the debates? Sure there may be an urgency to Congress and the POTUS working together prior to December 31, but for goodness sakes, WHY has CBS not done its job and pressed this issue long before the eve of the first debate? BUT, the flip side of this idea, is that President OBAMA can have an excuse to bring up the issue of DO-NOTHING REPUBLICANS in Congress.

[john92021]

meanwhile Hillary wants us to borrow 1 billion to give to the Saudis.

[Montana5]

Please let this happen!!!

[rscherf1]

Someone has to pay for all the money our government gives to other countries while ours falls apart.

[infantryman1968]

Unresolved fiscal cliff could raise taxes for 90 percent of U.S. families

LOL!

This is exactly what Obama and his followers want, More Taxes, More Spending, More Dependence on Government.

[dj_chi]

The GOP could have dealt with it before skating out of town. Once again they chose to turn their backs ont he people and their obligations.

[Honest-Engine]

I want in the 47% club. How do I apply ? LOL

[bigmanfrommaine]

If you put Congress in an airtight room and told them they would have to pass a budget before the oxygen ran out, they would all be dead on the floor come the next morning.

[1notrub11]

You, sir, are SO close to the truth!