Time magazine recently noted a hypothetical couple with four children and combined earnings of $82,000 could face a tax increase of up to $6,000 per year if they use child care and invest $10,000 in stocks and 401(k)s. That huge spike will occur because the marginal tax rate on much of the couple's income will jump from 15 percent to 28 percent, while their standard deduction will decline and their child tax credit will be slashed. Changes in the payroll tax and dividend tax increases would also hit the couple.
Yet even with everyone from the very rich to the relatively poor taking a (sometimes substantial) tax hit, the fiscal cliff's tax-and-spending changes would still leave the United States with a sizable deficit. The cliff involves about $671 billion in tax increases and spending cuts; the country is on pace for a fifth consecutive annual deficit of more than $1 trillion. That leaves a deficit of more than $300 billion.
This is the harsh reality of Obamanomics. Under this president, you could increase taxes on the rich, the poor, married couples, those with children, small business, big business and everyone in between, and slash defense spending — and you still can't pay for all his spending. You don't even come close.