Because of the breakdown in the “fiscal cliff” talks (what a dumb name), everyone’s taxes might go up. Should you be worried?
The general answer is no, in the long run this won’t hurt your standard of living. And that’s because, after necessities like basic food, shelter and healthcare (which will soon be provided by Obamacare), all of our wants are positional wants rather than absolute wants. Everything we think we want is based on what others have and want, and furthermore the costs of many positional goods, including the cost of housing in a neighborhood safe from NAMs and low proles, are based on what people can afford to spend rather than some absolute value.
Of course all changes in policy will benefit some people and adversely impact others. I would say that tax increases hurt homeowners and benefit renters. They benefit people who have a secure job and hurt the unemployed and those who might be fired because of the temporary reduction in economic activity which follows tax hikes. The especially significant increase in estate taxes will hurt the heirs of people with a net worth of more than $1 million who failed to engage in good pre-tax-increase estate planning.