- Government programs. Little or no impact. Most programs affecting lower income earners are exempt from the sequester, i.e. budget cuts. For details, see The Sequester Explained by The Bipartisan Policy Center.
- Taxes. Going up due mainly to elimination or reduction of tax credits, such as the child tax credit, increase in lowest tax bracket from 10-15%, a lower standard deduction and the expiration of the payroll tax reduction. However, as reported in What will happen when the Bush tax cuts run out, the higher tax increase will be on the higher income earners. In addition, due to refundable tax credits, a number of lower income earners will continue to pay zero federal income tax and mainly see a lower refund.
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This is not financial or tax advice. Please consult a professional advisor.
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