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Deficit Hysteria Means The Middle Class Is About To Get Squeezed By New Taxes

Posted Jul 07, 2010 10:55am EDT by Joe Weisenthal and Gus Lubin
Related: udn, gld, uup, tlt, tbt, ^gspc, ^dji

Provided by Business Insider, July 7, 2010:

If you're in the camp that thinks the deficit is still a non-issue, and that the US can't possibly default on its debt, then this will be maddening to you.

Fears over the deficit -- almost certainly a medium-to-long-term issue -- likely means that the middle class is going to get hit with rising taxes in the very, very short term.

CNN discusses the upcoming expiry of the Bush tax cuts. At one point, there was talk that the tax cuts would certainly be extended for the middle class, but that's looking less and less certain.

Previously it had been assumed that only those making over $250K would get slapped:

The cost of doing so for everyone would top $3 trillion over 10 years. Making them permanent for families making less than $250,000 - which tracks with Obama's promise - would cost less but not much less: an estimated $2.2 trillion.

Two prominent Senate Democrats recently told The Hill, a newspaper that covers Congress, that the $250,000 threshold is not necessarily a done deal with Congress.

Sen. Byron Dorgan, D-N.D., who chairs the Senate Democratic Policy Committee, said he didn't think there was "any magic" in $250,000. Sen. Dianne Feinstein, D-Calif., noted "you could go lower ... why not $200,000? With the debt and deficit we have, you can't make promises to people."

Now click here to see all the new taxes coming your way >

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