In Six Months - You Pay!!!

[usranger74]

Six Months to Go Until
The Largest Tax Hikes in History
July 1, 2010

Contact: Ryan Ellis, ATR Tax Policy Director: rellis@atr.org

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.

Thesefamilies 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.

[Idaho]

What have we allowed to happen to our Country? The Democrats can NEVER again be allowed to have unlimited power.

[AlabamaNomadRider]

Guess things will have gone from bad to worse. Most people are just barely getting by now. What will they do then?

[NRiderUSA]

Hope and change for all of us... just most of Hope they cant change anymore.....

[NRiderUSA]

Dont forget the VAT tax and Cap and trade tax and Carbon Tax and............oh well just figure the Dems are in control and they have proven throughout their history that the are experts at Tax and Spending and spending and spending.
And oh by the way, Pelosi needs a new office that costs more a month than most peoples houses do in years, flies on planes provided by the peoples money that cost millions each trip (which giving credit does include the Wet bar and Chiefs to cook the gormet meals).
Etc Etc Etc.......... Let them eat cake is the new Mantra from this administration.

Funny how they tell us to not drive big cars yet they do, we dont need big houses as they enter their mansions, we should eat meat as they have a banquet of steaks and prime rib, we should not go to vegas as they go to the golf course.........

Gore leads by example for global warming by driving Huge SUV's, buying a Huge energy sucking mansion on the coast (which will be soon under water according to him).


America needs to wake up and smell the truth as seen in the actions not the words of these people.

Democrats= Do as we say not as we do.

[cactusjack]

I heard this morning on the news that Obama is likely to lose his Democratic congress come November. People want Republicans in DC to act as a check against Obama.

[blowndodge]

"people making less that 250k per year will not have their taxes go up one thin dime"..

Seems I heard this before from someone?

I'm so disappointed in the shear stupidity of the American Public. Osama bin Laden could have got elected here.... it's a shame what America has become...

A few months ago, President Obama appointed a commission to examine America's debt, now standing at more than $13 trillion. The president appointed Erskine Bowles, a former top adviser to Bill Clinton, to co-chair the commission.

Here's a quote from the other day:

"What's clear to me from just glancing at it is that if we don't restore some fiscal sanity around here as a nation, we are going to go broke. I know that's not a word people like to use, but it happens to be true. We face the most predictable, economic crisis in history. And if we stay on automatic pilot, the debt we are accumulating will be like a cancer. It will definitely destroy this country from within."

[usranger74]

If the "Rs" do get back in power I pray they do a better job than the last time they had the "power".

10 yrs ago, if GWB and the Rs had held to their "stated' beliefs in a smaller more effective Fed Govt and had they not acted like a drunken sailor on a spending spree, there would be no BO today.

Can the Rs walk their talk? That is an open question.

[Sin City Stan]

Originally Posted by cactusjack

I heard this morning on the news that Obama is likely to lose his Democratic congress come November. People want Republicans in DC to act as a check against Obama.

The problem is he already has a plan when he loses Congress in November. A lame duck session in November and December to rival all previous lame duck sessions. This is where they will attempt to push Cap & Trade and a whole litany of other taxes through Congress.

[macmac]

All I know is I will not be voting for anyone I already know the name of. The 2 parties are the same thing to me. I will vote only for a CONS party of Independants. Even if i have to run myself.
God help us all in that case.

The one thing for sure is, i can't do any worse can I?

[Dave]

Originally Posted by macmac

All I know is I will not be voting for anyone I already know the name of. The 2 parties are the same thing to me. I will vote only for a CONS party of Independants. Even if i have to run myself.
God help us all in that case.

The one thing for sure is, i can't do any worse can I?

No kidding! I've not voted for either party in over 20 years. I always vote Libertarian. I love it when people tell me I'm throwing my vote away. I say B.S. It's mine and it does not belong to either the Dems or Reps.

[macmac]

I have never know securty my whole life Dave. At age 58 it's too late. I just want the CONS back so I can understand something, and the rule won't be 'changed' in the middle of the game.

On the other hand any country that passes the 200 year mark has a grim history of what happens next.

[sneedvegas]

Nothing is going to happen in November. Americans have a sense of entitlement and they like what they democrats are peddling. Its the same crap my professors preached at my liberal college. The liberal left knows they don't have a majority, so the only way they can get their agenda passed is to pump up the people with lies and win a few elections then do as much damage as they can until the people realize they've been taken. What they weren't counting on is that the voters would be this naive to put in this administration and congress. Look how much they've destroyed in less than 2 years. They have 2 more years. Ready or not, the country has got what they asked for.

[NRiderUSA]

Listening to the news last night about the NAACP officially announcing the Tea Party are a bunch of racist white people and Uncle Tom black people, I think the Dems in their usual manor of keeping the race card in play by the "its their fault" manor they have perfected over the decades.
They are trying to insure the minority vote because "whitey" is still suppressing them and bringing up stuff that happened 60 years ago to prove it and if they dont vote Democrat the lynchings will continue..... I am so fed up with this race crap, I dont know of any situation they say happened and they cant prove it.... unfortunatley all they have to do is say it... and the sheep believe it.
IMHO most Obama voters voted for a pretty speech and color of skin after watching the 24X7 Obama specials during the election on TV.... I dont believe thats going to change. They know what they want to hear and so do the Democrats. All they need to do is say it and they will follow again.

I also heard someone saying that the Dems are pushing thru as much as they can before they get canned cause come November, Even the repubs are going to be lame ducks under Obama, and will be unable to re-track anything or in-act anything.....