Tags: Tax | hikes | cost | taxpayer

Study: Expiration of Tax Cuts Would Cost Each Taxpayer up to $5,700

By    |   Thursday, 16 Aug 2012 07:55 AM

Failure to extend the George W. Bush-era tax cuts would mean additional payments of up to $5,700 per year for American taxpayers, according to a new study from the Tax Foundation.

And that stiffer burden would probably cause a recession, the study’s co-author concludes.

Connecticut residents would suffer most, paying $5,783 a year more on average, while Mississippi residents would get it easiest, with an average payment hike of $1,310.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist. 

The Bush tax cuts will expire Dec. 31 unless Congress and President Barack Obama come to an agreement to continue them.

"It's pretty dramatic,” Tax Foundation Chief Economist Will McBride tells CNBC.

“This is the biggest tax increase that would happen since World War II. I can't think of anyone who's really seriously thinking we should go through this. It would almost certainly result in another recession."

A failure by the government to act would hurt the stock market too, he said.

“This sort of domestic policy would immediately impact demand and really shock investors,” McBride argues. “I would expect the stock market to take a real hit in September if something like this is not passed."

Fear of the impending tax hikes already is hurting the economy, says money manager Hugh Johnson, chairman of Hugh Johnson Advisors, a money management firm.

“Anytime there’s uncertainty, it creates inaction, whether it’s on the part of individual investors or corporations, which are really puzzled,” he tells Yahoo.

Editor's Note: 'It’s Curtains for the US' — Hear Unapologetic Warning from Prophetic Economist.

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