When Taxmageddon hits on January 1, 2013, the financial devastation will be immense. Heritage Foundation experts strongly oppose the liberal plan to allow such massive tax hikes during this tough economy.

Taxmageddon will affect all Americans. Here are five consequences we can expect on January 1:

  1. $494 billion in tax increases resulting from expiring tax cuts and the introduction of new Obamacare taxes;
  2. $3,800 in new taxes on the average American household in 2013 alone;
  3. A huge hit to low-income Americans as Taxmageddon falls primarily on middle- and low-income Americans;
  4. Even slower job creation, resulting from the new taxes on work and investment, will prevent many unemployed Americans from finding new work; and
  5. Uncertainty that will harm and slow down families, businesses, entrepreneurs and investors in making critical economic decisions.

Heritage economist Curtis Dubay elaborates on why this tax hike is a bad idea:

The August jobs report is the latest in a series of gloomy jobs reports. Well under projections, the economy added a paltry 96,000 new jobs in August, and July and June employment was revised downward. Most alarming were the nearly 400,000 workers who left the workforce in August, bringing the labor force participation rate to its lowest point in 30 years. GDP growth is also showing a trend of deceleration…

The mounting evidence shows that the economy cannot withstand a major tax increase in a few months. Rather than continue to subject the economy to Taxmageddon’s crippling uncertainty, Congress should take that burden off of America’s job creators now. Until it does so, we can expect further troubling economic data, including weak job numbers.

To learn more about Taxmageddon and keep up to date with the latest reports and research, visit Heritage.org.

Do you think a one-year $494 billion tax increase is the best way to solve our economic problems?

Comments (19)

Chris Campos - September 25, 2012

Good article, but I would like to get recommendations on how we can fix the following problems. As well as the steps Heritage is taking forward to make positive changes occur.

Seabird - September 25, 2012

Would someone PLEASE give this information to the Romney campaign !!! Why are they letting the lying Obama political ads go unanswered ???

Holly - September 25, 2012

That’s your typical solution from the statists, Democrats, leftists and all other miscreants. Our economic problems will be solved by free market capitalist principles, the significant elimination of regulations and meaningful tax cuts.We need a leader who will provide certainty for business. I seem to recall the phrase “the business of America is business.” What happened to that? We have to allow the market to soar with the kinds of policies put in place by Ronald Reagan.

Janet Carlson - September 25, 2012

Absolutely NO! The economic problems confronting our nation are overspending, reckless spending, and fraud by this current administration.

Suzanne Arbour - September 25, 2012

I DO NOT believe anything that comes from Obama, because after 4 years of him we have learned that anything he says is false or lies.

Ellen - September 25, 2012

A tax increase is the WORST way to solve our economic problems especially since it will hurt the middle class tax payers the hardest.

John K Daugherty - September 25, 2012

This tax increase will be a disaster – exactly as planned by this administration.

Robert Calabro - September 25, 2012

I believe in the Austrian and supply side theory of economics. During a recession, the government should do no harm! Let the market work. I have studied the work of von Hyack, Rothbart and Von Mises. All three agree that during a recession the government should cut taxes and spending. This would result in an orderly transfer of wealth from the government who took it to the people who worked hard all their life to earn it. The goal is to transfer as much capital to the private sector as possible so that business could use this capital to correct mistakes. This increase in capital could prevent layoffs. The keysian theory of economics should be relegated to history with socialism and communism as a failure. Regards Robert Calabro.

Michael Cox - September 25, 2012

No such thing as a one-year tax increase. I fear that the new tax income will be spent on programs that tend to keep people from wanting to be employed. We must reduce gov’t spending and let people keep more of their money, not redistribute! We must not lose this election!

B. May - September 25, 2012

It becomes obvious that a further increase in taxation is not the right direction for the country on moral grounds and on an economic basis. Drawing down the expenditures is not realized by increasing taxes essentially giving the US government more revenues to spend when in actuality we need a reduction in expenditures.

Taking a longer term view, $16T in debt and rising, occurred over a longer period of time indicating that taken with the other liabilities of the US government, we have been on the wrong philosophical path for quite sometime. We can either change course and not only reduce expenditures, but we also need increased GDP to drive government revenues at a reduced tax rate (to be competitive with global competitors) or else we face a hard stop, as the world is not going to continue to be our lender when it becomes so obvious that we have no ability to repay our debts and meet our obligations.

Creating wealth has to be the primary objective of all US citizens, as our Constitution led us to believe we are free to do so without recourse from a government that interferes with markets and our lives.

Ron Turner - September 25, 2012

Nobama. Vote republican!

jwbeck - September 26, 2012

It’s clear where Mr. Obama wants to take our country. I have never seen, in the last 50 years, a president who has been so adamant about pushing such a Leftist agenda. Lyndon Johnson and Jimmy Carter were runners-up, but Barack Obama is far-and-away the champion of Leftist change. Most people have chosen sides, and dug in. All we can do to turn this situation around is 1) Pray for America, and that righteous leaders will be elected; 2) Don’t merely get 10 of your acquaintances to vote, get 50; and 3) Hope that Americans for Prosperity again have phone banks this year, so we can reach into the Battle Ground states from wherever we are, and activate the less-active. There have to be more of us than the Left, on voting day. No question about it.

e. r. edmondson - September 26, 2012

We already know that taxing does NOT work. That’s why we had American Revolution #1 in 1776. We are now in the second American Revolution over the same problem. Since history always repeats itself, it is clear that we are going to revolt against these taxes. ALL Americans will have to vote Republican to avoid the same ending and get rid of this ObamaCare TAX Law.

maryjo shannon - September 26, 2012

NO! We must not raise taxes, but need to cut spending and eliminate fraud to lower the deficit.

Janet - September 26, 2012

Please, tell the campaign managers of Romney & Ryan to UN-LEASH them… Come on we need to hear from them LOUD & CLEAR!!!!!!!!!! Tell it like it is!

Tony Cook - September 26, 2012

Raising taxes will reduce revenue. It’s a proven fact. The US doesn’t have a tax problem, it has a SPENDING PROBLEM, caused in large by a bunch of self-serving politicians who are more concerned with staying in office than doing the job they are in office to do. Term limits, now!

patsy davidson - September 26, 2012

definitely NO.!!! We do not need any additional taxes. Half the people dont even have jobs. And Obama says he has help jobs, He has hurt them. And his stupid ObamaCare us doing the rest. every american will be paying for ones who do not have insurance. this is what will make your taxes higher. We really need to repeal
ObamaCare. This wouild really help everyone.But Romney said their parts of ObamaCare he likes, Their is nothing about it i care for.

Craig Yelton - September 28, 2012

Oh,yes please raise taxes on everyone-that’s always worked so successfully in the past. ATTENTION ALL MORONS: you can’t tax your way into prosperity!

Sid Pennington - October 3, 2012

I think the present approach is the problem. It is too political. The budget and off-budget approach should be changed. Everything should be budgeted. The money collected for Social Security or Medicare should be kept separate from the general funds. The Federals employees retirement fund should also be isolated and the Government should at their share to this pot, which they never have. Once the Republicans gain control they should look closely at the “Fair Tax approach”. This approach covers not only the income tax but also covers the payroll tax. It eliminates the IRS and the need for filing returns. Also anyone who visits this country and buys something or criminals who do not pay tax will pay whenever they spend money. There are a lot of others areas that should addressed but I think thsi would be done once the problem is addressed.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.