The negotiations and talks are a work in progress in Washington to avoid the Fiscal Cliff. The concern for the United States Government is attempt to strike a budget deal in order to avoid a possible second recession. A new study by the Tax Foundation calculated if the Fiscal Cliff laws expire Minnesotans of a household size of four would pay 5.02 percent more in taxes on income compared to 2011.
The detail study conducted by the nonpartisan tax research group based in Washington, D.C. did an individual assessment of all 50 states. The North Star State for example could see an immediate impact if an agreement is not reached families that earn $87,319 would pay $4,382 in taxes for 2013.
The information compiled was used from the U.S Census Bureau and the Internal Revenue Service to approximately calculate how families in the country would be paying amidst this uncertainty.
The Twin Cities Business blog highlighted what are some of the consequences of the hike in taxes compared to the rest of the nation.
“If Congressional leaders are unable to find a solution before arriving at the so-called “fiscal cliff,” Minnesotans are expected to face an increase in taxes—although taxpayers in the state are likely to experience a smaller impact than those from some other states.”
Besides reducing the nation’s deficit along with the spending, is also fixing the Alternative Minimum Tax (ATM), which according to the think tank “Has yet to be patched for the current tax year, let alone next.”
A 2 percent temporary cut to employee is one of three of possible tax increases that may affect a majority of taxpayers, according to report.
The Chairman of the Federal Reserve Ben Bernanke indicated in a Reuters article that 2013 could be a very good year for the U.S economy.
“Such uncertainties will only be increased by discord and delay,” he told the Economic Club of New York. “In contrast, cooperation and creativity to deliver fiscal clarity – in particular, a plan for resolving the nation’s long-term budgetary issues without harming the recovery – could help make the new year a very good one for the American economy,” said Bernanke.
For the new year the dynamics for politics are filled with prospects to yield new legislative results and move from the deadlocks that we witness during the first term for President Barack Obama. With the Republican Party doing some soul searching as to what happened on Nov. 6, 2012 is a consequence of their stance on certain issues voters disagreed with.
If you want to learn information on the findings and tax details for your state please click here. Two tables can be found on the page that offer a complete breakdown and snapshot of taxes. In addition, the top ten states that may be affected if the nothing falls through at the beginning of next year.