Fiscal Cliff Some Facts

1) The term fiscal cliff dates back decades, but who was the first prominent government official to use it to describe the situation facing the U.S. government in 2013? Ans. Federal Reserve Chairman Ben S. Bernanke 2) Tax rates are set to go up for all brackets on Jan. 1 with the expiration of the George W. Bush-era tax cuts. What would the top tax rate be if the cuts expire? Ans. 39.6% 3) Nearly 90% of households would see a tax increase in 2013 because of the expiration of various tax cuts. What would the approximate average tax increase be? Ans. $3500 4) What part of the federal budget would take the biggest percentage cut under the automatic spending reductions known as the sequester that begin next year? Ans. Defence programs 5) What would the unemployment rate be in the fourth quarter of 2013 under the latest Congressional Budget Office estimate of the fiscal cliffs impact? Ans. 9.1% 6) President Obama wants to extend the Bush tax cuts permanently for all household income up to what level for married couples? Ans. $250,000 7) The highest tax rate for long-term capital gains would increase next year to what level? Ans. 20%

8) Which tax provision does not face automatic changes next year? Ans. Mortgage interest deduction 9) Going over the cliff would NOT result in: Ans. A reduction in the debt ceiling 10) If all of the mandated spending cuts and tax increases take effect, economists estimate they would total next year more than: Ans. $500 Billion 11) The term sequestration refers to all of the following except:

The threat of across-the-board cuts in federal spending A mechanism intended to force lawmakers to reduce the deficit Automatic tax hikes on those making over $250,000 Spending reductions that would begin on Jan. 2, 2013

Ans. Automatic tax hikes on those making over $ 250000 12) According to a Pew survey conducted earlier this month, what percent of Americans say they understand the impact of the fiscal cliff very well? Ans. 26%