Changes

Letting these cuts expire would lead to higher taxes for every tax group. {{cquote|The existing 10% bracket will go away, and the lowest "new" bracket will be 15%. The existing 25% bracket will be replaced by the "new" 28% bracket; the existing 28% bracket will be replaced by the new 31% bracket; the existing 33% bracket will be replaced by the 36% bracket; and the existing 35% bracket will be replaced by the 39.6% bracket.}}

Letting these cuts expire would lead to higher taxes for every tax group. {{cquote|The existing 10% bracket will go away, and the lowest "new" bracket will be 15%. The existing 25% bracket will be replaced by the "new" 28% bracket; the existing 28% bracket will be replaced by the new 31% bracket; the existing 33% bracket will be replaced by the 36% bracket; and the existing 35% bracket will be replaced by the 39.6% bracket.}}

Capital gains will increase to 20% from 15%, the maximum tax rate on dividends will skyrocket to 39.6%. <ref>[http://www.smartmoney.com/taxes/income/how-the-expiring-bush-tax-cuts-affect-you/ What End of Bush Tax Cuts Would Mean for You, Smartmoney.com, May 12, 2012]</ref> Joint-filer (Marriage penalty) tax brackets will return to 167% of the amount for singles, causing higher tax bills for many low and middle income Americans. Phase-Out Rule for itemized deductions could eliminate up to 80% of higher-income bracket deductions for mortgage interest, state and local taxes, and charitable donations. Phase-Out Rule for personal exemptions could eliminate some higher-income bracket personal exemption deductions (typically average $3,800.).

Capital gains will increase to 20% from 15%, the maximum tax rate on dividends will skyrocket to 39.6%.<ref>[http://www.smartmoney.com/taxes/income/how-the-expiring-bush-tax-cuts-affect-you/ What End of Bush Tax Cuts Would Mean for You, Smartmoney.com, May 12, 2012]</ref> Joint-filer (Marriage penalty) tax brackets will return to 167% of the amount for singles, causing higher tax bills for many low and middle income Americans. Phase-Out Rule for itemized deductions could eliminate up to 80% of higher-income bracket deductions for mortgage interest, state and local taxes, and charitable donations. Phase-Out Rule for personal exemptions could eliminate some higher-income bracket personal exemption deductions (typically average $3,800.).

==Democratic proposals==

==Democratic proposals==

On January 4, 2013, the CBO issued a summary of the impact of the law.<ref>{{cite news|url=http://thehill.com/blogs/on-the-money/economy/275095-cbo-fiscal-cliff-deal-carries-4-trillion-price-tag|title=

On January 4, 2013, the CBO issued a summary of the impact of the law.<ref>{{cite news|url=http://thehill.com/blogs/on-the-money/economy/275095-cbo-fiscal-cliff-deal-carries-4-trillion-price-tag|title=

CBO: 'Fiscal cliff' deal carries $4 trillion price tag over next decade|first=Peter|last=Schroeder|work=The Hill|date=January 1, 2013|accessdate=January 3, 2013}}</ref>  It found a $3.9 billion increase in the deficit over 2013-2022 compared with the existing law allowing the economy to "go over the cliff."  However, it projected a -0.5% immediate GNP hit on the economy under the existing law compared with a 1.5% to 1.75% GNP growth under the new law in 2013.  Over the long term, the CBO projects that under the new law, GNP "would be 1.7 percent lower in 2022 than would have been the case under prior law."<ref>{{cite web|url=http://www.cbo.gov/publication/43835?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812526&utm_campaign=0|title=The “Fiscal Cliff” Deal|work=Congressional Budget Office|date=January 4, 2013|accessdate=January 6, 2013}}</ref>

CBO: 'Fiscal cliff' deal carries $4 trillion price tag over next decade|first=Peter|last=Schroeder|work=The Hill|date=January 1, 2013|accessdate=January 3, 2013}}</ref>  It found a $3.9 billion increase in the deficit over 2013-2022 compared with the existing law allowing the economy to "go over the cliff."  However, it projected a -0.5% immediate GNP hit on the economy under the existing law compared with a 1.5% to 1.75% GNP growth under the new law in 2013.  Over the long term, the CBO projects that under the new law, GNP "would be 1.7 percent lower in 2022 than would have been the case under prior law."<ref>{{cite web|url=http://www.cbo.gov/publication/43835?utm_source=feedblitz&utm_medium=FeedBlitzEmail&utm_content=812526&utm_campaign=0|title=The "Fiscal Cliff" Deal|work=Congressional Budget Office|date=January 4, 2013|accessdate=January 6, 2013}}</ref>

== See also ==

== See also ==