If there’s one thing politicians excel at, it’s bickering, and the hot topic this week has been what to do about Bush-era tax cuts.
President Obama wants to permanently extend the tax cuts for middle-class families while allowing them to expire for individuals making more than $200,000 and households making more than $250,000.
Obama is trading barbs with Rep. John Boehner of Ohio, the top House Republican, who wants a two-year freeze on all tax rates, retaining the Bush-era tax cuts.
Of course, both sides argue that their plan is the best for the ailing U.S. economy, but what about your own economy?
The Tax Policy Center has come up with a handy calculator that allows you to see how your taxes would be affected based on three possible scenarios: going with Obama’s plan, keeping things the way they are or allowing the tax cuts to expire.
The tool allows you to select for age, income level, marriage status and children. For example, a married couple with two young children and an income of about $75,000 would pay $1,653 in federal income tax under current law, $1,008 under Obama's proposal and $4,290 if the tax cuts are allowed to expire.
Take a deeper dive into the calculator and you can customize based on everything from childcare expenses to charitable contributions. Or if you don’t feel like inputting all that data, the Tax Policy Center will give you sample figures based on the average amounts people in roughly the same income bracket reported on their tax returns.
Roberton Williams, senior fellow at the Tax Policy Center, said the tool was designed to answer the question on many people’s minds: “What’s going to happen to me next year?”
(He also conceded that it was a good place to send reporters who keep calling and asking the center to run these types of calculations for them.)
The Tax Policy Center, a project of the Urban Institute and Brookings Institution, also has done extensive research on the larger economic effect any tax policy changes related to the Bush tax cuts. Wonky readers who want to know more than they ever thought possible about the implications of the tax cuts on both taxpayers and the government, this link is for you.