Six Months to Go Until The Largest Tax Hikes in History

Discussion in 'Politics' started by dvinman, Jul 27, 2010.

  1. dvinman
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    dvinman VIP Member

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    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:

    (N.B. This version of the document contains even more tax hikes than the original version did)

    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 Tanning Tax. This went into effect on July 1st of this year. It imposes a new, 10% excise tax on getting a tan at a tanning salon. There is no exemption for tanners making less than $250,000 per year.

    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 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.

    Brand Name Drug Tax. Starting next year, there will be a multi-billion dollar tax assessment imposed on name-brand drug manufacturers. This tax, like all excise taxes, will raise the price of medicine, hurting everyone.

    Economic Substance Doctrine. The IRS is now empowered to disallow perfectly-legal tax deductions and maneuvers merely because it judges that the deduction or action lacks “economic substance.” This is obviously an arbitrary empowerment of IRS agents.

    Employer Reporting of Health Insurance Costs on a W-2. This will start for W-2s in the 2011 tax year. While not a tax increase in itself, it makes it very easy for Congress to tax employer-provided healthcare benefits later.

    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. These 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.

    Six Months to Go Until<br> The Largest Tax Hikes in History
     
  2. Douger
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    Douger BANNED

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    Welcome to " Great" Britain.
    You fools lost that " war" too.
    The media told you different.

    Give me control of a nation's money and I care not who makes her laws. Mayer Amschel Rothschild
     
  3. Mr. Shaman
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    Mr. Shaman Senior Member

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    That's what they called it, the last-time-around.....and, it was bullshit, THEN, as WELL.

    :rolleyes:
    >>Fast-forward>> to......​

    Sorry, dvinman....we're merely dropping-back to Bill Clinton's tax-rate$.
    *
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    (You remember THO$E......DON'T YOU??!!!!!! :lol: )
     
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  4. topspin
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    topspin BANNED

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    there will be a deal that looks something like.
    Clinton rates on top 5%, they will scale back or eliminate the cap gains increase on the rich.
    thus the market goes up, progressives get to look like they are socking it to the rich.
     
  5. Mr. Shaman
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    Mr. Shaman Senior Member

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    Welcome to THE GREATEST ECONOMY THE U.S. EVER EXPERIENCED!!!....Dougie.

    [​IMG]


     
  6. Mr. Shaman
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    Mr. Shaman Senior Member

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    I don't see any need to complicate things....politically. There's no need to tweak things.

    We KNOW Clinton's tax-rate$ WORKED!

    We merely need to drop-back, and punt over the remnants of the BUSHCO-economy.....

    [​IMG]
     
  7. maineman
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    maineman BANNED

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    didn't the republican congress that passed those tax cuts purposely design them to expire in 2011? methinks the anger here is misplaced.
     
  8. Greenbeard
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    Greenbeard Gold Member

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    Indeed they did.
     
  9. Care4all
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    Care4all Warrior Princess Supporting Member

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    Yes, the republicans putting in those tax cuts DID MAKE THEM EXPIRE in 2011....wonder why? To mask their tremendous projected deficit spending....

    they played games with the budget...that's a FACT.

    Will the republicans allow the Democrats to fix their mess by continuing the tax breaks on the middle class while allowing the ones at the top expire....only ones hairdresser knows!? ;)
     
  10. hortysir
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    hortysir In Memorial of 47

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    It's been "six months" for how long, now?
     

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