Will the American Taxpayer Relief Act of 2012, signed by the president on January 2, raise your taxes? That’s the $600 billion question, and the answer depends on your specific financial circumstances. The nation’s top earners will owe significantly more than they did under the previous tax law. And most people, regardless of income, will find themselves paying a bit more in 2013. But considering the massive tax hikes that would have gone into effect if Congress hadn’t acted, the law is worth noting for what it doesn’t do: It doesn’t touch broad elements of the Bush-era tax cuts of 2001 and 2003. And unlike the temporary extension of those cuts two years ago, this time the rules are permanent. There are no more “automatic” tax hikes looming. However you may view its specific provisions, the new law adds a sense of stability to the tax structure. That said, few experts see this law as the ultimate fix for the nation’s deficit problem. It leaves unanswered many questions about the combination of further tax increases and spending cuts that may be necessary if the nation is to reduce its long-term debt.
Here is an analysis of the recently passed tax law. This report examines the major provisions of the law.