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Get ready. On January 1, 2013, "Taxmageddon" is set to strike.
If you're not worried yet, you should be.
January 1st is when six alarming tax increases and hundreds of drastic spending cuts could begin draining as much as $607 billion out of the pockets of American taxpayers.
"It's a fiscal tsunami," says Money Morning's Don Miller. "The damage will be so widespread it could derail the entire U.S. economy."
The tax changes won't just slam a few income brackets. They'll reach all taxpayers.
Every one of the existing income tax brackets will be ratcheted up – by as much as 50% in some cases. And for most American households, these tax increases could mean thousands of dollars in lost income.
"If Congress fails to act, Taxmageddon assures that we will all be paying higher taxes next year," says Miller.
Along with , specific increases will hit retirees, investors and wage earners even harder.
Americans in any of those categories could end up paying exorbitant penalties – for exactly the actions needed to support the shaky U.S. economic recovery.
Meanwhile, the Democratic Senate and the Republican House are more interested in "drawing lines in the political sand" than they are in finding meaningful solutions, according to Miller.
And with election season set to add rocket fuel to the fire, the situation is about to turn into an all-out turf war.
"And if Congress doesn't get its act together in time," says Miller, "You should prepare your own finances for Taxmageddon."
That includes figuring out exactly how much you will pay if all six of the Taxmageddon tax increases go into effect – and taking precautions to limit the effects on your bottom line.
Editor's note: Real facts and figures about Taxmageddon are in short supply right now. That's why Money Morning has created a free comprehensive guide to help you prepare for January 1st. Inside this new report, you'll learn exactly where the six Taxmageddon tax increases will strike – and how much you'll end up paying next year.
6 Alarming Tax Increases
You Can Expect Next Year
Here's What You'll Owe
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