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5 things you need to know about the 'fiscal cliff'

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    How going over the edge would impact your bottom line

  • Duration 5:17
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Because likelihood of America going -- the fiscal -- becomes greater and greater by the hour what does that really mean for you and the American taxpayer and your wallet my next -- -- broken down.

The most important things that everyone must know if we do in fact go over the cliff joining me now to explain all of this Washington times columnist -- picket.

Emily Fox Business Network Charles Payne guys for -- you both think they want us.

-- -- Well actually showing us why don't we just start win it.

It's our job back and actually break art news right now just like to go.

I'm actually -- aren't you guys do know that but as -- -- OK I apologized.

Well let's start with the basics what does this mean for the average American if in fact.

It December 31 comes and goes we -- -- the Clinton -- Well first of all it's gonna be at the Twilight Zone for a lot of people who are in the middle class because for.

It's almost like you're gonna have a number of people who.

We're trying to actually get into the upper income levels and then all the -- rod sterling is gonna come along he's gonna say yeah I guess what you are rich.

But you don't lose everything.

For one thing.

I we're going to see the the -- CI a number of people lose their jobs about 3.4 million jobs are projected to be -- according to the CBO.

What we're also going to see.

As the it.

Obama care -- tax hikes hit us if you don't have health care.

Then I -- you're going to hit with a penalty if your employer doesn't provide you with the health care they're -- -- be hit with a penalty.

-- also the AMT.

-- Patch if they don't Doug fix that then -- -- kept -- -- them to exactly.

That is going to hit -- as as well -- people in the middle class who never thought they are gong to.

Get hit they're going to fight -- they are wealthy.

So -- just a couple of things that they're going to hit you know what people in this country.

Charles let me go through a real -- -- -- you respond -- each and every one of them if I -- the first one is going to be of course the the doc fix.

Which woods should Kerry was just talking about.

It would also mean capital gains with a capital gains rate will go as high as 55% for many Americans.

And I'm sorry will go up to 20% from 15% the estate tax would go to 55%.

We have obamacare taxes for many individuals is going to be point 9% on those earning over 200000 dollars that is an almost another full percentage point.

Also we have a penalty tax is going to be imposed on the individuals.

And also some employers.

And then on top of that we got as -- mentioned the Alternative Minimum Tax patch we got.

Five huge consequences.

Right out of the box you cover the economy every day what -- what does that mean to you and how does that affect.

The average person that is gonna watch -- -- throw.

Well you know saw a lot of people entered a new year thinking wow I can't wait to file my taxes so I can get my tax return check.

Well here's the irony will start from the bottom of that list.

The AMT is my favorite thing to talk about because it's also known as the wealth tax.

It was -- -- 43 years ago because 106.

Thing that -- -- evil greedy.

People were not paying their quote on quote fair share.

This time around if it's not patched up it could impact 33.

Million.

People starting at 74000 why.

It was never indexed for inflation it was one of these taxes put the place for punitive measures very much like legislation that we see all the time now.

Not to help the economy but -- somehow punish those people who have seen that does have the upper hand on all of us as far as everything else is concerned.

While unemployment let's talk about that anyone out there watching this show.

Receiving extended unemployment benefits -- those due by January 6 of the economy.

It all -- January 1 -- the snowball starts the role in the -- their roles that that's a role to become the concentric circle and -- becomes a giant boulder Beckett take five to 6% out of our GDP by the end of the year.

You know ironically carry the Alternative Minimum Tax was supposed to hit.

With the wealthy 27 million middle class Americans will be impacted here one other thing there are.

It was very interesting observation there -- people.

This -- estate taxes after they pay taxes their entire lives are gonna go up to 55%.

That's how -- the government will take.

After that you paid all of your taxes.

And the government is gonna get more than half of what you have left that includes the golden UT.

And maybe you know a little spare change in your pocket.

Pretty sad and an -- that is anticipatory -- anything else.

Absolutely.

Yeah otherwise known as the death tax which I preferred to to call it it keeping my shot the the estate tax I'm also -- it is.

It would it actually collapsed in 2010 and there were jokes essentially going around disabled this is tied to people -- you pull the plug on on the relative.

But remember -- came back in 2011 and it ended up coming back at 35% but if you go to the clip it -- that the 55%.

Unbelievable guys good to see a great information we'll continue to follow appreciate it.

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