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Looming Fiscal Cliff Leaves Many Confused, Concerned

U.S. Capitol - Washington, DC - Aug 1, 2011 (credit: Mark Wilson/Getty Images)

U.S. Capitol – Washington, DC – Aug 1, 2011 (credit: Mark Wilson/Getty Images)

NEW YORK (CBSNewYork) — Even as the country barrels toward the fiscal cliff, there was much confusion about what exactly lies ahead – both for regular people and the country as a whole.

As CBS 2’s Jessica Schneider reported, even the question of what the fiscal cliff is sparks great confusion.

“What?” said Gigi Maresca of the Lower East Side.

“Um, I would say, it’s a mountain?” said Shaborn Banks of the South Bronx.

“I go to (the Fashion Institute of Technology.) I’m not an economics major,” added Morgan Collins of Island Park, Long Island.

But even without an economics degree, many realized the implications of the looming end-of-the-year deadline on Capitol Hill are serious.

“I’m of the middle class, and it’s going to affect how much I take home,” said Desiree Edwards of Springfield Gardens, Queens.

The term “fiscal cliff” was coined by Federal Reserve Chairman Ben Bernanke earlier this year.

If no deal is reached in Washington by Jan. 1, deep spending cuts will take hold and taxes on 90 percent of Americans will go up. The temporary payroll tax cuts and certain tax breaks for business, and the upper-income tax cuts enacted by President George W. Bush, are set to end as of New Year’s.

The Obama administration wants a tax hike on the wealthiest Americans, while House Speaker John Boehner (R-Ohio) has called for cuts in entitlements such as Medicare and Medicaid.

Some fear if negotiations remain at a stalemate, a national recession could result.

“Inevitably, the average taxpayer will have to hand over more of their money,” said tax expert David Selig.

For example, the Social Security payroll tax cut would mean a hike for everyone making money.

For a household earning $20,000 to $40,000, it would mean a tax increase of $1,200. For an income of $40,000 to $64,000, it would mean an increase of $2,000. An income of $64,000 to $109,000 would mean an increase of $3,500.

“I just want to pay less taxes, so whatever we’ve got to do,” said Joseph Toto of Allentown, Pa.

How are you feeling about the negotiations? Please leave your comments below…