

Ask HN: Impact of going over the fiscal cliff for a Californian employee? - 10dpd

What is the <i>practical</i> impact of going over the fiscal cliff for:<p>1. A Californian employee?
2. A California-based startup?<p>I've read about tax rises, but what % are we actually talking about?
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il
As an employee, your taxes going up by at least 20% immediately. As a startup,
loss of many of your customers and a significantly more challenging funding
environment due to a fall back into recession and continued economic
uncertainty.

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noomerikal
Yeah, that's practical.

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dangrossman
If you're poor with kids, you'll probably pay around $1800 more due to
reductions in the Earned Income Credit.

No kids, your tax rate goes up a little, and you lose the 2% payroll taxes,
and the American Opportunity tax credit for education.

If you're middle-income, you'll probably pay $2000-6000 more.

If you're earning closer to six figures, you'll probably be hit by the AMT and
pay over $10,000 more this year.

Around 30 million new people will qualify for the Alternative Minimum Tax if
no legislation is passed to increase its income thresholds. That means instead
of a progressive tax, you'll pay a flat income tax rate of 26% or 28% on every
dollar, plus the higher payroll taxes and lost credits.

