What Happens If Congress Does Nothing?

If Congress fails to extend the Bush tax cuts, the tax system will undergo the equivalent of unelective full-body surgery. Higher rates will hit every dollar earned from income and investment. Benefits from low-income people will fall. Taxes on rich families' inheritance will come roaring back. Over ten years, the effect on total tax income for the government would be in the trillions of dollars. Americans will miss out on a media tax cut of about $1,000, as this graph from the

So it's no surprise that Congress is working to avoid this tax hike, at least for some people, at least for some time. The Obama plan is to preserve the tax cuts for about 98 percent of Americans and let taxes on the rich rise to their higher, 1999-levels next year. But what happens if he and Congress fail to act, the same way they failed to extend the estate tax in 2009? What will change, and how?

Taxes can be confusing. So here's a simple slideshow primer from a recent presentation on the Great 2010 Tax Debate from the Tax Policy Center. Many thanks to Roberton Williams for permission to run the presentation on The Atlantic.

Presented by

Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we still save the night sky?

Join the Discussion

After you comment, click Post. If you’re not already logged in you will be asked to log in or register with Disqus.

Please note that The Atlantic's account system is separate from our commenting system. To log in or register with The Atlantic, use the Sign In button at the top of every page.

blog comments powered by Disqus

Video

What Happened to the Milky Way?

Light pollution has taken away our ability to see the stars. Can we still save the night sky?

Video

The Faces of #BlackLivesMatter

Scenes from a recent protest in New York City

Video

Desegregated, Yet Unequal

A short documentary about the legacy of Boston busing

Video

Ruth Bader Ginsburg on Life

The Supreme Court justice talks gender equality and marriage.

Video

Social Media: The Video Game

What if the validation of your peers could "level up" your life?

Video

The Pentagon's $1.5 Trillion Mistake

The F-35 fighter jet was supposed to do everything. Instead, it can barely do anything.

More in Business

Just In