As we enter the final month of 2012 we inch ever closer the âfiscal cliffâ conundrum that Congress and President Obama will have to face. The Congressional Budget Office (CBO) anticipates that the fiscal cliff will lead to a recession and a jump in the jobless rate to 9.1% by the end of 2013. If a deal were to be made to avoid the fiscal cliff it would lead to an additional $503 billion in budget deficits according to the CBO. President Obama plans to deal with this deficit by increasing the tax on Americans who earn more than $250,000 annually. Currently the two percent of citizens who fall in this range pay 43.6% (as of 2008) of all personal federal income taxes, a fair share in my eyes. This also doesnât take into account the philanthropic efforts which many of these people participate. The tax increase that is being proposed would yield $30-$40 billion in additional revenue which hardly alleviates the current budget deficit. For those who still believe there should be an increase in taxes for individuals in the one percent an argument that is commonly used is that many of these âone percentersâ inherited their wealth and didnât earn it themselves. This, quite frankly, is ludicrous. The Harrison Group, a well-respected strategic marketing consulting and research services firm, has determined that 85% of the âone percentersâ accumulated their wealth during their lifetime and only 3% of their total assets came as of inheritance. In essence the Fiscal Cliff is the automatic legal trigger will make spending cuts and tax increases that will lead to decreased deficit in 2013. If this legal trigger occurs it is estimated that the budget deficit will shrink from over $1.1 trillion to about $641 billion. Of the $607 billion that will be eliminated from the deficit the largest portion of that ($221 billion) would come from an increase in individual income taxes beginning in the 2013 calendar year. Many people, especially those in the one percent, are very concerned about the cliff and the potential tax hikes. Due to the re-election of President Obama it is likely he will propose new bills focused on tax cuts if we do go over the supposed cliff. About the Author: 20 year old student attending University of Connecticut. Graduating Class 2014. Pursuing Bachelor of Arts Degree in Economics including Quantitative Certificate with a Geography minor. Born and raised in Weston, CT.