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How Will Taxmageddon Impact You?

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    Heritage Foundation Director Bill Beach on how the looming tax hikes will impact Americans.

  • Duration 4:53
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Please bring in cash tax and again is on its way it if congress doesn't make a move by the end of this year.

The bush tax cuts will expire -- investors will pay more for capital gains and dividends.

And just about everything else we could see a possible 494 billion dollars right.

To the economy in here with me is -- Beach from The Heritage Foundation break it all down more as what strikes me the most about this is that.

I'm sure people know that every one is going to get hit by this right I -- if you look at low income workers.

People make less than 35000 dollars a year they're gonna get hit with a tax increase a better than 12100 dollars there's a lot of groups affected.

Right in in including retirees from -- here are people who.

Who really don't have wages or salaries if they're not working or if they don't own -- business -- retirement many due course.

And because dividend taxes go up taxes on capital gains go up.

Even retirees get hit nearly a thousand dollars an additional income it's a significant amount for every demographic group that's out there nobody escapes.

-- again with their search side it's a very serious stuff financial moment from for every American.

Yeah let's go through some of the groups -- I think we have some illustrations of this that we can put up on the street in the very baby boomers age.

46 to 64 and that group could see their taxes increase by more than 4200.

Dollars.

You mentioned the retirees but even the youngest group believe -- as they're called seventeen to 31 year old.

Could see there taxes increase by about a thousand dollars.

Likely though that the politicians in charge are gonna try and save big groups that they hope will -- for them.

Well -- I would hope you're right I mean I -- they save us all hockey after which we all deserted his savior but.

Here's a situation where congress which which is quickly qualifying as the do nothing congress and president who doesn't really want to lead on this subject to running out of time.

We're where we're six months away from taxpayer getting -- -- -- that that's not a fantasy date.

That is the date on which all of these tax revisions.

Which have been kicked down the can month after month congress after congress come due.

Isn't job and an option we can't punch a button and it'll go away.

In this the largest tax increase in US history I -- topple which we were very weak economy right now.

You know why increase taxes and any time but especially when the economy is so weak.

And I was talking to somebody in the -- chief financial officer.

Recently for big corporation they told me it's really too late to change their decisions they -- they have concluded that congress is gonna increase these taxes.

You know -- it's inching these bring that up because we also you know of course should be automatic spending cuts that would go into effect as well.

And a lot of people think that we have six months it for these things to happen in order to fix it but you talk about that -- there's also Jamie -- a Capitol Hill this week saying.

That the deadline is a lot sooner than we think -- companies are making their plans and people are making their plans.

On how they're gonna deal and budget for this and that it could be it at a hit to our economy already years sooner that we thing.

-- -- I think it's already hit the economy and I think part of the slowdown we're seeing right now is attributable to the fact.

That chief investment officers are saying to there.

Their boards look let's not make those investments the rate of return is gonna have to be too high in 2013.

To justify that investment in -- rate -- return.

Has to include our return on higher taxes too and so so with those people who are making decisions about.

Big pieces of machinery or for -- -- building a new plant or equipment moving a firm to another location.

All of these would have boosted the economy -- decisions have now put off until after maybe 2013 maybe never.

So -- not really get depressed and I -- talk myself and -- its highest you know inevitable is there anything that the politicians could do quickly to sort of straighten this out what -- what they made a deal next week.

Yeah it it it it's coming but it's not inevitable so if if congress acts this summer to.

Permanently extend the 20012003.

Tax relief that that would be a huge step for that's a 165 billion dollars of taxes that won't happen next year.

If they do that.

They need to do the same by the end of the year with the payroll tax with a lot of the small taxes that are going to occur with.

And and then of course there's another 23 billion dollars worth of brand new taxes coming out of the Affordable Care Act so called Obama care.

We need to.

-- have that period of time from basically the middle of October to the end of the year when congress can take care of the rest of the taxes that way.

We're gonna have an economy they'll grow and taxpayers will be facing the worst story -- ever after New Year's even mean you know the day after New Year's Eve is hard enough anyway.

Right are -- pay higher taxes you're right here right don't pilot on on west -- beach from The Heritage Foundation thanks for joining us.

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