Middle class families could see a big tax increase next year, according to a study by the Independent Tax Policy Center.
The group warned Tuesday that families making between $40,000 and $60,000 a year may see taxes go up by $2,000 if numerous tax cuts are not renewed by Congress.
The tax hikes headed America's way on Jan. 1 include one so steep, some congressional aides are calling it "taxmageddon."
"It's $500 billion of higher taxes just in 2013 alone," explained tax policy analyst Curtis Dubay, who works for the Heritage Foundation's Institute for Economic Policy Studies.
"A tax hike of that size for just one year is simply unprecedented," he added. "It's going to take an enormous chunk of the economy out of the hands of the businesses and people and families that earned the income and give it to Congress to spend."
Click play to watch John Waage's report followed by analysis from Bill Frezza of the Competitive Enterprise Institute.
Not only will the Bush-era tax cuts end in December, but much more.
- The Social Security payroll tax will jump from 4.2 percent to 6.2 percent of employee pay.
- The child exemption will drop from $1,000 to $500 per child.
- The repair of the marriage penalty will disappear, meaning many married couples will suddenly have to pay more taxes.
Analysts say middle income Americans will be treated like they're rich in the eyes of the Internal Revenue Service and taxed much more.
"Seventy percent falls directly on middle and low income taxpayers," Dubay said.
But not everyone sees hiking taxes next year as a bad thing, especially if the increases hit the rich.
"Raising taxes in the short term and spending it, particularly taxes on the top end, will produce more jobs," said Robert Borosage, co-director of the Campaign for America's Future.
"We have a lot of corporations and a lot of very wealthy people sitting on their money," he said.
But Dubay said it's the threat of such tax hikes that keeps businesses from investing.
"There's so much uncertainty, they don't know if they can add new workers," he explained. "They don't know if they should make a new investment. So they're holding back and waiting."
Borosage worries that without new tax revenues, massive spending cuts would devastate public schools, public works, Pell grants for college kids, and more.
"Food stamps and Medicare and aid for the most vulnerable seniors, people at the end of their life. We're too rich a society to make those kinds of cuts," he said.
Congress and President Barack Obama together could stop "taxmageddon," but with the stakes so high this election, most expect little to happen before then.