Six Months to Go Until The Largest Tax Hikes in History
From Ryan Ellis on Thursday, July 1, 2010 4:15 PM
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/six-months-untilbr-largest-tax-hikes-a5171##ixzz0sWmPxmxf
~The George W Bush Tax Cuts for the RICH that got us into this economic mess will expire~
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
~The George W Bush Tax Cuts for the RICH that got us into this economic mess will expire~
We're 18 months into his presidency, Obama and the Democrats control both houses and the White House, why didn't Obama raise the taxes on the "RICH" and fix this problem?
No of course NOT EVERYTHING is GWB's fault... Just... ~The housing foreclosure crisis that cost America their homes... ~and the Stock market failure, (that cost America their IRA's, retirement savings, and investments...) ~and the Optional war in Iraq, (where there were NO WMD's, NO Mobile chemical weapons labs & NO ties with AlQaeda...) ~and the failure to apprehend Osama Bin Laden (caused by Bush diverting resources to his Oil War in Iraq)... ~and the Bush Economic Meltdown which threw America out of work... ~and the Bush Tax Cut for the Rich, (at the same time borrowing to pay for his wars against Islam.) ~and the new Republican Value of "Torture"... ~and spying on American citizens... No Wonder Bush was recently named "The Worst US President in Modern Times" (Siena)
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
Cicero, Q~ "why didn't Obama raise the taxes on the "RICH" and fix this problem?
A~ He did... see the opening post.
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
"I can make a firm pledge under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise.
Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
Yeah, the liberals who forced banks to stop the evil "redlining" and made them loan to bad credit risks is a conveinient thing to blame on Bush! LOL!!!!!
The stock market is doing GREAT with your little man boy tyrant.
There are NO terrorists in Iraq. Tell that to the dead troops who got blown up by AQ bombs.
I am thrilled man-boy captured Bin Laden. We knew he would. Nice to see the job done.
Bush is to blame for the government being so out of control and massive that it sucked the energy out of the private sector. I will give you 50% on that since he sucked the democrap's balls every chance he got and caved to them on spending.
yeah, just raise more taxes and see how much the producers want to produce. 60% is not enough? In my book it is for anyone. Only a criminla (which you are) would think it OK to take more than 60 % in taxes from people.
Interrogation is not torture, numbskull. But it is OK to not give people life saving medical treatment because government bureaucrats need months to do the paperwork. We will all be tortured by our government healthcare soon because of despicable little, nasty dirtbags like you, Chris.
Obama can turn off the internet, Bush wanted to listen to the phone calls of terrorists (THAT is what this as$hole means folks) but it is all good when a tyrant does it. And they still are, aren't they, LIAR?
I think the rankings will go "Obama, Carter, Bush" in the vaunted Siena poll soon. We will see.
"While Foreign Terrorists were plotting to murder and maim using homemade bombs in Boston, Democrap officials in Washington DC, Albany and here were busy watching ME and other law abiding American Citizens who are gun owners and taxpayers, in an effort to blame the nation's lack of security on US so that they could have a political scapegoat."
The personal playground of Right Wing NeoCon Grover Norquist???
Really??? I hope your tax man doesn't go by these figures!!!
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
Boxy....Obama, the head of the socialist liberal party, also promised NO TAX HIKES FOR THE MIDDLE CLASS!!!
Opps.....I'm sorry....did I just use HATE SPEECH AGAIN?
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Welcome to the second half of the year. And welcome to the ugly countdown to across-the-board tax increases that your friends in the Obama administration long insisted would only affect "the rich."
Come Jan. 1, income tax rates for everyone will rise, reminds Americans for Tax Reform. The 10 percent bracket becomes the 15 percent bracket. The 25s become the 28s; the 28s become the 31s; the 33s become the 36es; and those who now pay taxes at the 35 percent rate will, next New Year's Day, have to pay them at a rate of 39.6 percent.
If you're married, you'll pay higher taxes. Have kids? Higher taxes. Unless Congress acts, the Death Tax returns, yet again legalizing federal grave robbery.
Massively higher taxes (from 15 percent to 20 percent) are ahead on capital gains and on dividends (from 15 percent to 39.6 percent), with additional increases of nearly 4 percentage points on top of that in 2013.
Pre-tax purchases for nonprescription drugs will be eliminated. Those subjected to the Alternative Minimum Tax will rise by a factor of 7. And on and on and on and on..................>>>>........................>>>>................http://www.pittsburghlive.com/x/pittsburghtrib/opinion/s_688748.html
It doesn't take a rocket scientist to have known that there was going to be a huge tax hike after all of the money the government has and continues to spend. Couple that with the cuts to the states and you end up with a huge tax hike!!
Obama's ploy about taxing the 'rich', was just that.....a ploy. And couple that with his demonizing of the capitalistic economic system....and he created a perfect storm for himself. He had all the right words....'no middle class tax hikes'....'tax the rich'.....'greedy wall stret' ...... 'greedy businesses'. That is the rhetoric he used to sell his health care and stimulus bill!
'Tax the rich'????? who is he kidding? The rich is the circle he travels in. Just like they all do!
Like I said before.....the dems and reps are collectively responsible for the decades of mismanagement of our money!! They all share the blame! Obama is just the most recent in the continuing failure of our greedy elected officials!
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
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