In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:
- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%
Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.
The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Second Wave: Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.
The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”
Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.
Read more: http://www.atr.org/sixmonths.html?co...#ixzz0sYkvaI00
They aren't tax hikes, they are tax restorations.
How about sales tax applied to all Wall St trades?
How about dropping all subsidies to big oil/coal/gas?
How about taxing fund managers' fees as regular income instead of investment income?
nah, it's easier to make suckers like wage earners get screwed alone, with the evil corps escaping paying their way.
I don't know how much of that article is BS, but this line is:
The adoption tax credit was just extended and raised when the health care bill was passed.The dependent care and adoption tax credits will be cut.
Even you aren't that stupid. Letting a tax cut expire=raising taxes.They aren't tax hikes, they are tax restorations.
Bottom line taxes go up from one year to the next.
Dollar doesn't know the difference between the government and the US taxpayer. What's the big deal, CC?
The Bush tax cuts were deficit financed. If there's some way to pay for them responsibly, I'm all ears, CC. How we gonna pay for the the Bush tax cuts?
ofcourse people want hand outs from the goverment taxes have to go up
especially to pay for the new irs people
flat tax would = less irs people and less taxes
^^^Non sequitur?
Ducks likes to blame the poor, especially kids...
...people are living longer and require ever more expensive care..those two factors are the greatest cause of why social services spending keep increasing...not welfare mothers
LOL chain emails.
Blame the email but CC should have confirmed what he was posting was verifiable..this makes him no better than Ducks in the run- for-cover category
I thought you were kidding at first, then I realized you were serious.
The Bush Tax Cuts were a de facto bribe to get your vote. The U.S. couldn't afford them then, it can't afford them now. Even John McCain agreed with that.
As usual, the black man will have to do the dirty work and at a time when the economy is still in the after shock of the 2008 economic crisis.
lol bush tax cuts lol cap and trade lol VAT
lol good times ahead
Question CC: doesn't this country eventually have to start paying it's "credit card bills"? And before you start on your free spending Democrats rant, no GOP administration in the past 30 years has paid for anything they spent.
It's funny because conservative economists talk as if the era of Bush taxing was heinous enough as it was....when the american public has been taxed insanely heavier and the economy has still flourished.
The problem will never be taxation the problem is spending.
I wish there was a rule on federal workers like what The Governator declared on state government workers. Get your ing budget under control America.
The bottom line is that the Federal Government doesn't need 40% of my income. I'm not rich. I'm just trying to keep a small business going that hires 10 people. I pay 100% of health insurance for employee and family. They have all raised families on the checks I write every week. I respect them. They respect me.
Running a business is tough enough. I don't need my government trying to make it impossible to keep doing what I'm doing.
I could care less what the anonymous posters in this forum think about me.
LOL ignorant assholes that will never be able to pay off the student loans they are living off of because they are too ing stupid to ever be self sufficient.
BTW Manny, has Jekka figured out yet what a ing loser you are?
wait
wait
ing about something expiring, if its not supposed to expire it should't have an expiration date
those income tax rates are still pretty low my friend...
down here teh highest is 47%
you CC and your 4.6% of bush tax cuts. You're a selfish ing unpatriotic joke and a disingenuous liar.
It still means that taxes go up on EVERYONE. You really think another 3% of your gross income is no big deal?
And you are still a ing loser. Have a nice loser life.
I don't give a . See, unlike greedy & illogical you, I think we should pay for the things we spend on. I don't expect Bush's wars, the military, Interstate system, border security/homeland security and the TVA to pay for themselves. I don't believe in giving millionaires tens or hundreds of thousands of dollars so they can stuff it back into their savings accounts. I don't believe letting the ridiculous tax code that allowed it to happen in the first place, to expire, is the equivalent of a tax hike.
But again, I'm not the sack of dog that you are. CC.
If that was all we were paying for they would need no more than 25%. If you keep thinking "they" are smarter than you and will "look out" for you and are willing to keep allowing "them" to "take care" of you the you ing deserve what you (won't) get.
Government is too ing big. It is a big tick on our collective ass.
There are currently 1 users browsing this thread. (0 members and 1 guests)
Posting Permissions
Reply With Quote
