Wonkbook: The Number of the Day Is $3,446
Wonkbook’s Number of the Day: 6.2%, or $3,446. According to the Tax Policy Center, that’s the blow to after-tax income is 3.7 percent, or $412, most of which comes from the expiration of the stimulus tax breaks. Families right in the middle lose 4.4 percent of their after-tax income, or about $1,984, mostly from the expiration of the stimulus tax breaks and the payroll tax cut. And for families in the top one percent, going over the fiscal cliff will mean losing 10.5 percent of their after-tax income, or $120,537, mostly due to the expiration of the Bush tax cuts. So everyone takes a hit, but the rich get hit the hardest.
Step back for a moment to consider what this means: After a decade in which median household income fell by more than $10,000 — making it perhaps the worst decade for the middle class in modern American history — Congress, by virtue of being unable to come to a deal, might actually cut the money middle-income Americans have to spend after taxes by another $1,984.
They are, to their credit, trying to come up with a way to keep that from happening. We’ve got much more on those negotiations, and on the fiscal cliff in general, in today’s top story, so keep reading!
Congress is planning a post-election dodge of the fiscal cliff. “Senate leaders are closing in on a path for dealing with the ‘fiscal cliff’ facing the country in January, opting to try to use a postelection session of Congress to reach agreement on a comprehensive deficit reduction deal rather than a short-term solution. Senate Democrats and Republicans remain far apart on the details, and House Republicans continue to resist any discussion of tax increases. But lawmakers and aides say that a bipartisan group of senators is coalescing around an ambitious three-step process to avert a series of automatic tax increases and deep spending cuts…[S]enators would come to an agreement on a deficit reduction target — likely to be around $4 trillion over 10 years — to be reached through revenue raised by an overhaul of the tax code, savings from changes to social programs like Medicare and Social Security, and cuts to federal programs. Once the framework is approved, lawmakers would vote on expedited instructions to relevant Congressional committees to draft the details over six months to a year.” Jonathan Weisman in The New York Times.