CARSON CITY – A Nevada family of four with a median income of $65,212 will see a nearly 5 percent tax hike next year if a collection of tax breaks are not renewed by Congress as it deals with the so-called “fiscal cliff”, according to a new report by the Tax Foundation.
The 4.92 percent tax increase as a percentage of the median income ranks Nevada 29th among the states in the higher rates they would pay, the study determined.
The biggest increase if the Bush-era and President Obama tax cuts disappear in 2013 would be the 6.82 percent rate paid in New Jersey. The lowest would be the 4.12 percent rate in Washington state.
The total tax increase in Nevada would be $3,211 from 2011 to 2013, with $1,000 coming from the Child Tax Credit, $907 from other Bush era tax cuts, and $1,304 from an increase in the payroll tax, according to the Tax Foundation’s tax policy calculator.
In an analysis of the fiscal cliff released earlier this month, the Tax Foundation notes that on Jan. 1, 2013, five taxes enacted as part of the Patient Protection and Affordable Care Act (PPACA) – also called Obamacare – will take effect as well, along with sequester spending reductions of $109 billion due to the failure of the “supercommittee” to reach consensus on budget reductions.
“Taken together this fiscal cliff could potentially reduce economic output by hundreds of billions of dollars,” the foundation reports.
Various estimates have but the effects of the fiscal cliff on the economy at 4 percent or more of the gross domestic product in 2013.
The Tax Foundation is a non-profit, non-partisan tax research organization based in Washington, D.C.
