Largest tax hikes in U.S. History coming soon, in "three great waves"

Little-Acorn

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For those who believed Obama's promises that no one making under $250K would see any kind of tax hike: Sorry. But now that the election is over, the votes counted, and the Democrats firmly in charge, they can no longer keep you in your fantasy world. Hope you enjoyed it while it lasted.

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http://www.brookesnews.com/101207taxhikes.html

Six months to go until the largest tax hikes in United States history

Ryan Ellis
BrookesNews.Com
Monday 12 July 2010

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 percent bracket rises to an expanded 15 percent
• The 25 percent bracket rises to 28 percent
• The 28 percent bracket rises to 31 percent
• The 33 percent bracket rises to 36 percent
• The 35 percent bracket rises to 39.6 percent

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 percent 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.

Ryan Ellis is ATR Tax Policy Director and can be reached at rellis@atr.org .
 
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steveox

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The republicans will sweep the house and the senate now!!! Because of the powerful tea party protests!!! May i remind you the wealthy in England is paying 60%!!!!!! Obama promised he would soak the RICH!

Hes no differant then these liars
RichardNixon.jpg
GeraldFord.jpg
carter-jimmy.jpg

bush_clinton.jpg
 

orogenicman

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Umm, you make it sound like Obama lied, or else wrote a tax package that goes against his campaign platform. He didn't lie, noir did he write a tax package that was passed by Congress and signed into law. Obama made it very clear that he would not extend Bush's tax cuts. Period. He was very upfront about it. Since those cuts are not being extended, the taxes revert to what they were before those cuts were enacted. I knew it. You knew it (or should have), as did everyone who voted for him. Next.
 

steveox

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Umm, you make it sound like Obama lied, or else wrote a tax package that goes against his campaign platform. He didn't lie, noir did he write a tax package that was passed by Congress and signed into law. Obama made it very clear that he would not extend Bush's tax cuts. Period. He was very upfront about it. Since those cuts are not being extended, the taxes revert to what they were before those cuts were enacted. I knew it. You knew it (or should have), as did everyone who voted for him. Next.


And remember this

And this was the result in january 1993

and Remember this?

And this was the result in january 2001

And obama is gonna face his defeat in 2012 to this woman
 

pocketfullofshells

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Funny concept.....if it was so important to keep the taxes where they where....why did they make it so they have to be voted on to be extrended....they could have just made it a tax cut...and no renwal needed...then it would be raising taxes if they did it...this is just not renewing a cut...

It will be horrible though to go back to 1990's tax rate for the rich though... things where so bad then what with that econ being good, and balanced budgets ......
 

orogenicman

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Obama is going to face defeat at the hands of Sarah Palin?

ROFLMAO!

If this is all the Republicans have to offer, they've already lost the election.

:D
 

pocketfullofshells

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Obama uses the telepropter.

Yes, its called giving many speaches per day, and needing to look at the camera and not read them and not able to memorize them daily ...also the wrong word choice has major policy implications world wide possibly....

Palin writes her core beliefs on her hand, like when you use to cheat on a test in 3rd grade...
 

steveox

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Yes, its called giving many speaches per day, and needing to look at the camera and not read them and not able to memorize them daily ...also the wrong word choice has major policy implications world wide possibly....

Palin writes her core beliefs on her hand, like when you use to cheat on a test in 3rd grade...

And using telepropter is like someone telling you what to say. Like the KGB used to tell this guy what to say on American news.
Vladimir_Posner.jpg

This man doesnt have a mind of his own,,The KGB told him what to say. Its called properganda. And the Obama admin uses properganda.
 

orogenicman

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And using telepropter is like someone telling you what to say. Like the KGB used to tell this guy what to say on American news.
Vladimir_Posner.jpg

This man doesnt have a mind of his own,,The KGB told him what to say. Its called properganda. And the Obama admin uses properganda.

No other prolitician uses a teleprompter? Ever?
 

Pandora

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No other prolitician uses a teleprompter? Ever?

Oh sure every politician uses them, but how many of them thank themselves while reading a teleprompter and how many say other peoples lines or repeat the same lines over?

How many presidents talked about the army corps of engineers but pronounced the word corps as corpse over and over....



I do not know of any, if you do can you post them?
 
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