Washington, D.C., June 14, 2012—A tsunami of tax increases set for January 1, 2013 could cost the average U.S. family $4,138, according to newly released figures from The Heritage Foundation. Heritage’s new interactive website also breaks down the looming tax hikes by state and congressional district*.
The slew of tax increases (dubbed Taxmageddon) include the expiration of the 2001 and 2003 tax cuts as well as tax increases from the 2010 health care law. Unless Congress halts Taxmageddon, Americans will be hit with $494 billion in new taxes next year.
Specifically, Baby Boomers will pay on average $4,223 more in taxes; the typical millennial will pay $1,099 more; and retirees, on average, face $857 more in taxes. Even low-income workers will be hammered with an average $1,207 in additional taxes.
“This analysis personalizes the real economic threat Taxmageddon poses for American families and businesses,” says William Beach, author of the new study and director of The Heritage Foundation’s Center for Data Analysis. “This is causing huge uncertainty in the marketplace right now, and likely will slow our economy even before the tax increases hit next year.”
Taxpayers in California, New York, Texas, Florida, Illinois, and Pennsylvania face the highest tax increases. Among congressional districts, the 10 hardest hit would be:
See how much your taxes could increase from Taxmageddon by accessing Heritage’s interactive website now. And check out Heritage’s tax reform plan for a simpler, flat-tax rate at www.savingthedream.org.
The Heritage Foundation is the nation’s most broadly supported public policy research institute, with more than 710,000 individual, foundation and corporate donors. Founded in 1973, it develops public policy solutions that advance free enterprise, limited government, individual freedom, traditional values and a strong national defense.
*The congressional district data were drawn from the districts as they existed in 2010. While the general shape of new district lines is known, not enough detail down to the zip code level is available for Heritage’s CDA to produce tax estimates based on new district lines. For a more in-depth explanation of the methodology used, please visit www.heritage.org/obamataxhikes.