Fiscal Cliff Raw Deal: Workers making $30,000 to take bigger hit than those earning $500,000

Middle-class workers will take a bigger hit to their income proportionately than those earning between $200,000 and $500,000 under the new fiscal cliff deal, according to the nonpartisan Tax Policy Center.

Earners in the latter group will pay an average 1.3 percent more - or an additional $2,711 - in taxes this year, while workers making between $30,000 and $200,000 will see their paychecks shrink by as much as 1.7 percent - or up to $1,784 - the D.C.-based think tank reported.

Overall, nearly 80 percent of households will pay more money to the federal government as a result of the fiscal cliff deal.

When the deal was passed by Congress late Tuesday, President Obama said it prevented 'a middle class take hike that could have sent the economy back into recession' and have a 'severe impact' on American families.
'Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up,' he said.

To the contrary, the Tax Policy Center says roughly 70 percent of Americans will see their income taxes rise as a result of the deal. They won't rise as much as they would have if no deal had been reached and the fiscal cliff was triggered, but they will go up nonetheless.


[link to www.dailymail.co.uk]