And Juliette Tennert said that big number is a conservative estimate. It could actually be more than $2 billion. Regardless, it would mean residents would have fewer dollars to spend on some of life's basics, pay the mortgage and car insurance or put into savings.
"The biggest concern here is the magnitude and quickness of the impacts," Tennert said. "If there were some phasing in over time, the potential effects on the economy would not be so great."
If Congress does nothing to stop the country from falling over the so-called fiscal cliff in the next three weeks, a number of middle-class tax breaks would expire Jan. 1.
The Obama administration issued a report this month showing what that would mean for the states. It projects that in Utah, income taxes will automatically go up for 99 percent of families making less than $250,000 a year. The report also shows that:
- About 900,000 families will see their federal income taxes increase.
- A typical median-income family of four (earning $65,200) could see its income taxes rise by $2,200 as a result of losing the combination of the expanded child credit, marriage penalty relief, and the 10 percent bracket.
- Utah families will receive a smaller child tax credit, and 379,000 low- and moderate- income working families with children will lose access to the credit, costing them an average of $1,010 a year.
- About 112,000 middle-class families will no longer get help paying for college from the American Opportunity Tax Credit.
- Small businesses will be able to claim immediate tax deductions for only $25,000, rather than $250,000 of new investment.
If every tax cut were to expire, which Tennert sees as an unlikely scenario, Utahns would have less money in their pockets, which, in turn, would hurt state revenues. Tennert estimated that figure at $500 million. But coupled with the state's expected $300 million in new growth, the net result would be as much as a $200 million loss, she said. Deseret News
