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Ask HN: Impact of going over the fiscal cliff for a Californian employee?
What is the practical impact of going over the fiscal cliff for:
1. A Californian employee?
2. A California-based startup?
I've read about tax rises, but what % are we actually talking about?
- il 14y agoAs 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.
- noomerikal 14y agoYeah, that's practical.
- dangrossman 14y agoIf 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.