we ll rewrite the law using new wording and we ll catch more people in the 75% tax rate net. heather: stuart varney, i know you have a lot of work to do today. it is a busy day financially. thank you. thank you. gregg: what will it mean if lawmakers fail to strike a deal? according to the tax policy center 90% of the americans would see a tax hike in 2013. 121 million people will be paying a whole lot more in payroll taxs. those are social security payroll taxs. families making between 40 and $65,000 a year will have to pay an extra two grand to the u.s. government. the more you make, boy, that number really accelerates. heather? heather: another devastating blow in the fiscal cliff crisis, this mess, will be to the military. $500 billion slashed from the pentagon budget that is raising serious concerns about our national security. chairman of the house armed
move some money around so we won t default on our obligations but nonetheless we are out of money. this means if a debt ceiling deal is not included any fiscal cliff deal, and it is not likely to be. gregg: then this debt mess continues for a few months. and we ve still got to argue that out in congress between congress and the president. heather: geithner said last thursday, he called them, trort nary measures would have to be taken to borrow money. yep. heather: breaking news in europe on the big 75% tax rate that the french wanted to pass for the rich. the breaking news that a french court said a 75% tax rate on individuals is unfair. so it has been rejected. the court court says unless you apply it to households it is not fair to single out individuals. that means 75% tax at this moment is not in effect. the french government and francois hollande says, it won t make any difference.
mike emanuel, we want to hear from vice president biden or senate minority leader mitch mcconnell. they essentially took the lead in these talks whether the president and speaker john boehner couldn t cut a deal. mccan nell says he wants to reach agreement. and california senator dianne feinstein says failure is not an option. the danger to our people, to our military, to our nation s security. to our economic base is just too great not to have a solution. so, you know, what makes this government work is compromise. when you don t compromise there is stasis. we have had enough of that for too long. reporter: the president says if biden and mcconnell can t cut a deal the senate will vote on extending tax cuts for families making less than $250,000 a year and basically force republicans to go the politically risky route voting against it, gregg. gregg: essentially that means taxes are definitely going to go up? reporter: it seems the
$600 more in taxes. it doesn t sound like a lot to a lot of people but that takes a huge chunk out of putting food on the table and getting clothes for your children. it s a big deal. gregg: estate taxes will rice from 35% on 5 million or more to 55% on 1 million or more. you know this really affects a lot of people in the middle of america who have farms. if you have a farm a lot of times you don t have liquid assets, it may be worth more than a million dollars, someone passes away. you have to come up with hugest state tax you have to sell your farm that may have been in your family for years. this is a huge difference that we re seeing that could change. gregg: capital gains taxes will rice from 15% to 20%, but look at the dividends that will be taxed now at ordinary income which will more than double the rate. exactly. there are so many baby boomers and senior citizens out there that rely on dividend payments that come in every month as income to live off of.
potential tax hikes for every american what do we know about this possible bill? not much, and may be more importantly if it passes, what does it mean for your wallet on january 1st, that is if we fall off the cliff. matt mccall is president of penn financial group llc. the irs is today notifying employers on how much they will have to withhold from their employees checks. let s go through each and every one of these tax increases if there is no deal, and we dive off the cliff. let s begin with the first one. marginal income tax rates ric rice for nearly everybody in america. over 90% of americans will be hit with higher taxes, and everybody talks about the wealthy getting hit the hardest. what i find fascinating is two-thirds of americans that make less than $20,000 a year will get hit with higher tax rates which will equal a gain of close to $600 more per year in taxes. if you re making let s say $18,000 you could get hit with