With a month to go before the U.S. tax code turns into a pumpkin, or whatever it was before the 2001 and 2003 tax cuts and various provisions of the 2009 stimulus act–all set to expire at year end–ordinary Americans may have to wait till the last minute to find out their own fiscal fates.
To ease that uncertainty, the Urban Institute and Brookings Institute’s jointly run Tax Policy Center has devised a nifty fiscal cliff tax calculator that Americans can use to determine how various plans under consideration might affect their own tax bills.
The calculator uses templates for six prototypical taxpayers–a married family with two children under age 13 or a single filer, to cite two examples. Drop-down menus allow the participant to select from five different income levels, initially, but one can quite easily customize the inputs before calculating his fiscal fate.
In calculating one’s tax hit, a participant can compare four different fiscal scenarios: The first is the current 2012 tax law–what Americans are paying now (assuming Congress patches the alternative minimum tax, which it usually does last minute).
The second scenario is the 2013 fiscal cliff scenario; that is what Americans will pay if Congress takes no action and scheduled expirations take effect.
The third scenario is the Senate Democratic plan, which would extend the expiring Bush-era income tax cuts for a year for all but the wealthiest 2% of Americans and extend the credits enacted in the 2009 stimulus act, while allowing the temporary payroll tax cut to expire.
The fourth scenario is the Senate Republican plan, which would extend the Bush-era income tax rate but would allow the tax credits of the 2009 stimulus act and the payroll tax cut to expire.
The tax calculator allows participants to compare two of these four scenarios at a time for one of the six prototypical taxpayers, though the customization possibilities mean that one can run almost any scenario desired.