Anyone foolishly expecting to exhale now that the bickering of who should be president has ended better take another deep breath. The doom swirling around something called "taxmageddon" could make sniping from political action committees look like amateur hour.
"I think it's accurate," said Sen. Mike Crapo when Citydesk asked the three-term Idaho Republican senator about the apocalyptic-sounding term. "And if taxmageddon happens, every taxpayer in America, not just the wealthy, will see a significant increase in their taxes."
In an era that overabuses the cliche "perfect storm," taxmaggeddon is indeed a confluence of occurrences that could wreck Hurricane Sandy-like havoc on the American economy. Unless a lame-duck congress comes to the rescue, here's what happens to the U.S. tax code on Dec. 31:
• 2001 and 2003 Bush-era income tax provisions expire, pushing tax rates up across the board.
• Tax credits enacted in the federal stimulus evaporate.
• The payroll tax holiday goes away, raising taxes on America's 160 million wage earners.
• New provisions from the Affordable Care Act bump up taxes in order to increase federal revenues by $34.6 billion.
• Emergency unemployment benefits expire.
• $11 billion in cuts to the amounts physicians are paid under Medicare are instituted.
The Tax Policy Center estimates that the effects total more than half a trillion dollars next year alone.
The very wealthy would have the biggest hit, but the poor would not go unscathed. For households in the lowest income quintile, earning less than $20,113 a year, the average federal tax rate climbs 3.7 percent, with taxes increasing $412 annually, on average.
"There's genuine concern," said Crapo. "But I don't think we're at the point where the American people realize the imminency and scope of this threat. We used to talk about this by saying, 'If we don't solve our debt crisis, our children or grandchildren will pay a terrible price.' We create an impression that this issue is a decade or even a generation away."
In fact, the threat may be closer to days away, according to Crapo, who is anxious to head back to Washington, D.C., and get serious, no matter who's in the Oval Office.
"All the moving parts can be shuffled around, depending on political outcomes," he said. "But whoever is president has to be willing to look at overhauling the tax code."