Now all of these things -- the Alternative Minimum Tax, the undoing of Bush/Obama tax cuts, and the Budget Control Act -- are about to hit in seven weeks. What will that look like? How will it feel? How could we avoid it?



To the graphs, my friends.

What Does the Fiscal Cliff Look Like?



Here is an at-a-glance look at the $500 billion in government savings that will take place in 2013. Taxes are in BLUE. Spending is in RED.



The pie, as you can see, is almost all blue. This is a tax cliff. Or a taxy knoll. Whatever.



Half of the savings come from the expiration of the Bush tax cuts, the Obama tax credits, and the payroll tax cut. Another quarter comes from the alternative minimum tax kicking in and walloping upper-middle-class and rich families.

As for the Budget Control Act, it's a $1.2 trillion machete chop to government spending. But that's a 10-year figure. Only 5% of that cut -- about $65 billion -- would actually take place in 2013, according to the Committee for a Responsible Federal Budget. That's a big deal for defense contractors and doctors and federal government employees.



But most Americans wouldn't feel it. They'd just feel the tax hike.



How Much Would the Fiscal Cliff Cost You?

You pay more. That's the three word summary of the fiscal cliff's impact on your taxes.

If your household makes a typical salary -- say, $50,000 -- you should expect to pay $2,000 more in taxes next year. If your household makes an atypical salary -- say, $500,000 -- you should expect to take a $50,000 hit. The richer you are, the bigger the hit you face as a share of income. The top 0.1% would see an average tax hike of $600,000.



Where do the tax increases come from? To answer that question, here's another great chart via TPC that shows which policies would raise your taxes and by how much.

The poorest Americans, few of whom pay federal income taxes, would be hurt mostly by higher payroll taxes and expired credits from the Obama stimulus. The typical household would be hit equally by higher payroll taxes and the expiration of the Bush tax cuts. The hit to the richest 1% would come mostly from the expiration of the Bush tax cuts, alone. Payroll taxes and stimulus credits barely affect them.



What Will the Fiscal Cliff Do to the Economy?

The double whammy of spending cuts and tax changes will push the U.S. economy into a recession in the first six months of 2013, according to the Congressional Budget Office. Unemployment would rise to 9%. Real GDP would decline by about 3% in the first half of 2013. That's a certain double-dip.

But don't confuse certain for immediate. If we wake up on January 1 with no deal, we won't be in a recession. Stocks might get jittery. Cable news will get super-jittery. Corporate leaders will sign more letters. But the deadline for avoiding the recession isn't hard, and it's not December 31, 2012.

