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LINDA WERTHEIMER, HOST:

President Obama will visit an Iowa family today to talk about taxes. It's a campaign event to promote his call yesterday to extend the Bush-era tax cuts for a year for families earning less than $250,000 annually.

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PRESIDENT BARACK OBAMA: My message to Congress is this: Pass a bill extending the tax cuts for the middle class. I will sign it tomorrow.

WERTHEIMER: Republicans want to extend the cuts for everyone, including the wealthy. If there is no agreement by the end of this year, the Bush cuts will expire. That, and the threat of deep spending cuts has economists warning of going over a fiscal cliff. And that brings to an occasional series we're kicking off this morning. We're calling it Fiscal Cliff Notes.

(SOUNDBITE OF ARCHIVED AUDIO)

UNIDENTIFIED MAN #1: On January 1st, 2013, there's going to be a massive fiscal cliff of large spending cuts...

UNIDENTIFIED WOMAN #1: From the painful cuts to the Defense Department, food safety, education...

UNIDENTIFIED MAN #2: The Bush tax cuts, the payroll tax cuts...

UNIDENTIFIED MAN #3: Taxmageddon.

UNIDENTIFIED MAN #4: It's a cliff.

UNIDENTIFIED MAN #5: Whatever your preferred imagery, it's a really big deal.

WERTHEIMER: We're going to hear a lot more talk like this over the coming months, a lot of dire warnings, a lot of political spin and a whole of numbers. Without Fiscal Cliff Notes, we hope to sift for facts and filter out politics. NPR's Tamara Keith starts with a look at what the expiration of the Bush-era tax cuts would mean for middle-income families.

TAMARA KEITH, BYLINE: The vast majority of American taxpayers would take a hit if the cuts expire, including Randi Cartmill and her husband Josh Walling, who live in Madison, Wisconsin with their three children.

JOSH WALLING: Let's set the table, guys. Here, Ryan, you get the forks.

KEITH: Their household income hovers a little below the national median, in the $40,000 to $50,000 range. Cartmill says the tax cuts have helped the family's bottom line.

RANDI CARTMILL: I remember when they went into place, and being pleasantly surprised by how much more money we got back.

KEITH: In part, that's because the tax cuts doubled the tax credit for each child, from $500 to a thousand. Also, the cuts created a new tax bracket for the lowest levels of income, which gives most families an $875 break. If these cuts were to expire, the Cartmill-Walling family's after-tax income would drop by about $2,500.

CARTMILL: That's a substantial amount of money. Generally what we do with our tax refund is we use that as kind of our savings in the bank for, you know, the car breaks down or the water heater goes or whatever, and we have a big expense all at once.

KEITH: The way Walling sees it, that's like a 5 percent cut to their income on top of other blows they've taken as a result of the tough economy.

WALLING: I don't think my wife was explaining quite how hard it is, you know, but that's pretty much where it's at.

KEITH: And they're not alone. The non-partisan Tax Policy Center estimates 96 percent of taxpayers at the middle of the income distribution would see their taxes go up.

ROBERTON WILLIAMS: An average of about $1,800 a year. That will reduce their after-tax income by about 4 percent.

KEITH: Roberton Williams is a senior fellow at the center.

WILLIAMS: Four percent, if you're spending every dollar you've got, makes a noticeable dent in your budget.

KEITH: And to give you a sense of the other side of the ledger, according to the Joint Committee on Taxation, extending just the higher child tax credit over the next decade would add almost $270 billion to the deficit. Tamara Keith, NPR News, Washington.

WERTHEIMER: You're listening to MORNING EDITION, from NPR News.

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