General Discussion
In reply to the discussion: Ouch, the truth, it hurts. [View all]Yo_Mama
(8,303 posts)Seriously, it would be an utter disaster for many moderate income families with children.
http://www.whitehouse.gov//sites/default/files/docs/state-reports/Hispanic-Fact-Sheet.pdf
Please take a look at this fact sheet, which is billed as being for Hispanics but applies to all families in this position. The tax increases given don't account for the expiration of the payroll tax cut. For a family with two kids earning about 50K, the total tax increase would be over $2,500 of income. That's increase, not total taxes.
The lower earning heads of households would be hit the worse - the example given of the mother of three may be a bit extreme, but it is factually correct. In addition, she would also pay an additional $290 in extra FICA, so that woman would face a total lost income (in the form of extra taxes and lost rebates) of $2,685.
With tax increases like this, massive defaults on rent and mortgages and car loans are expected. We would have an increase in homeless families, a huge increase of mortgage delinquencies (which are already rising rapidly, despite what you read in the news).
We would have rapidly tightened home loan standards, a big drop in retail employment and all sorts of ancillary problems.