Dramatic changes to both tax and spending policy at the federal level are scheduled to take place at the end of the current year unless Congress acts. On the tax side, the most significant changes are the expiration of Bush-era income tax cuts and provisions relating to the Alternative Minimum Tax, which will increase liabilities nationwide. When ranked by city, the heaviest impacts will fall in Texas, Georgia, Oregon and Arizona, with metropolitan areas in Arizona, California and Virginia filling out the top 10. "We found that higher- and lower-income areas tended to be affected more than middle income areas -- higher-income areas from changes to the Alternative Minimum Tax and lower-income areas from the Bush tax cuts," said Tax Foundation analyst Nick Kasprak.One U.S. consumer demographic that is particularly vulnerable to the fiscal cliff is military families. According to First Command, a Fort Worth, Texas-based investment firm, budget cuts and higher taxes are a painful one-two punch for military families. In fact, about 50% of that demographic are already cutting back on spending to cope with the fallout from the economic cliff dive. The First Command Financial Behaviors Index, released last week, says that about 66% of middle-class military families (mostly senior NCOs and commissioned officers in pay grades E-6 and above with household incomes of at least $50,000) say the U.S. government won't cut a deal by the end of the year. "The fiscal cliff is a major concern for service members and their families," says Scott Spiker, CEO of First Command Financial Services. "Roughly seven in 10 believe that a failure to resolve the fiscal cliff stalemate will mean an increase in their taxes and a slowdown in job growth. Two-thirds of survey respondents fear the U.S. economy might slip back into recession." Then there's the "sequestration" issue, in which the U.S. defense budget is set to be cut automatically and significantly. "While the looming fiscal cliff deadline has been making the headlines, military families may be even more troubled by the spending reductions that are already in process," adds Spiker. "Defense downsizing will affect one-sixth of the military, impacting retirement pay and benefits. Promotion rates will decline. The result is an uncertain future for many military families."