Unless action is taken by Congress, a large number of federal tax increases and spending cuts are scheduled to take effect once the new year rolls around. Everyone is calling it “the fiscal cliff.”
NPR has broken the increases and cuts down into three (and a half) simple visual graphics. If we fall off the “cliff,” Americans can expect $380 billion in tax increases, mostly due to the expiration of Bush-era tax cuts and an alternative minimum tax increase that most experts say isn’t going to actually happen. Spending cuts would total $100 billion. The bulk of these cuts will come from “the sequester,” a group of random cuts mostly hitting defense and Medicare spending.