Families and the Fiscal Cliff

04 Dec Families and the Fiscal Cliff

The looming fiscal cliff could result in the average family paying approximately $2,000 more in taxes (projections are anywhere from $1,500-$3,000). So what can the average family do with $2,000? Quite a bit it seems. I put together a list of just how far $2,000 stretches for the family on a budget:

1)   Childcare- $2,000 could pay for 8 weeks of childcare for one child at $250 per week ($250 per week is on the low end of childcare costs. Costs are significantly higher for younger children/babies).

2)   Gas- With a relatively small tank, $2,000 is enough for 50 fill ups at $40 a tank (I drive a small car so I don’t even want to imagine how that is reduced by a having a bigger vehicle).

3)   Food- $2,000 buys 5,000 reduced priced school breakfast/lunch and $1,666 full price school lunches. $2,000 is enough to make sure your kids have school breakfast/lunch for years!

4)   Health- $2,000 is about half the cost of metal or clear braces.

5)   $2,000 can protect a family of four from the flu virus for 12 years Vaccinations are approximately $40 each).

6)   $2,000 will purchase college textbooks for 4 semesters.

7)   $2,000 is enough to pay gas or electric bills for some families for an entire year.

$2,000 goes a long way.

There is a lot of discussion about how fiscal cliff would affect middle-class families. Indeed all of the costs above assume having the money to pay for such things in the first place. Fiscal cliff effect estimates assume having taxable income. Families of lower socioeconomic status will most certainly take a hit. The Earned Income Tax Credit, Child Tax Credit expansions and the American Opportunity Credit for college tuition are among the credits set to expire on December 31^st. Unfortunately, discussions of the expirations that will affect the nation’s poorest remains overshadowed by how the fiscal cliff will impact middle-upper class tax payers.