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Most people will just have to adjust their savings. I certainly don’t waste my time worrying about it but I will just make adjustments to my budget just like I do when other items increase. I think many people will survive this as these were what people were paying ten years ago...so people still have that money it is just attached to savings. Remember everyone had money left over at the end of the month because the taxes were decreased. However, I believe that they will extend the tax decrease for a bit longer.

I truly do not know how many average people can “adjust their savings” by $5K or $10K or more a year, without losing their ability to save entirely. I listen to Dave Ramsey and a lot of people live from paycheck to paycheck. The idea of having to stop or even raid retirement savings (what's left after 50% loss in 08/09) to pay income tax bills is frightening, especially since there is no more reliable stock market to invets in, and no real estate appreciation to provide a future source of wealth to draw from in retirement.

That is where I worry. And if people like me are worried about coming up with thousands more in taxes (we already did this past year with the AMT) then a lot of people could be in big trouble.