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Economic fallout if we head over 'fiscal cliff'

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    What to expect if deal is not reached?

  • Duration 2:03
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So what really happens if we do go over the fiscal cliff correspondent Molly Henneberg explains.

It means more money coming out of your -- The warnings are all over the place.

Taxes are going up on almost every one immediately if Washington can't come to a deal on a fiscal clips.

You're gonna have less money to spend in a very difficult economy with very little clarity if in fact we -- go -- the fiscal cliff.

It means the economy is gonna go down pretty sharply.

And already stretched family budgets will be stretched even more.

Look at these numbers from the Tax Policy Center.

For those whose taxes do go up this is the average tax hit families we'll take on top of what they already pay in taxes.

Below 101000 dollars -- pay an average of about 300 dollars more.

Those who make between forty and 50000 they'll have to pay an extra 17100.

In the next group of wage earners fifty to 75000.

Now have to find an extra 2300.

Dollars to send to Washington.

And if you managed to make over 200000 dollars it will be a big jump up.

You'll need to send a check to Uncle Sam for -- averaged about 141000.

Additional dollars.

And the highest wage earners here those numbers 500000 to a million.

You'll pay an average of 34000.

Dollars more.

And over a million VI RS will want 2161000.

Additional dollars from you on top of which you already pay in taxes.

Ed you Toski a wealth manager says the money you have left won't go as far as business is also deal with their own tax hikes.

You're gonna seem less money in your paycheck.

You're gonna see wages going up at a slower rate and you gonna see prices of everything you spend money on court dramatically.

The federal government also have to bite the economic bullet with one point two trillion dollars in spending cuts.

More than half of that is to the defense budget -- -- he says families may need to do an austerity calculation before making big purchases.

He says look at the money you have and the money he'll need in the future.

And decide you really need that next big purchase.

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