by Kerby Anderson: There are massive tax increases coming next year. Curtis Dubay with the Heritage Foundation calls it “Taxmageddon.” He was on my radio program recently explaining how each American taxpayer could be hit with a major tax increase, unless Congress acts.
A third of the tax increases from Taxmageddon comes from the expiration of the 2001 and 2003 Bush tax cuts. These cuts reduced the marginal tax rates, but they also reduced the marriage penalty and increased such things as the Child Tax Credit.
The increased tax rates will affect all taxpayers.. The bottom ten percent tax bracket would go up to fifteen percent. The twenty-five percent tax rate would go up to twenty-eight percent, and so forth. The per child tax credit would be cut in half. The capital gains tax would increase, and the marriage penalty would return.
Another one-fourth of the tax increase from Taxmageddon comes from the expiration of the once-temporary payroll tax cut. And another one-fourth comes from the expiration of the patch on the Alternative Minimum Tax.
The balance of the tax hikes comes in part from new taxes under Obamacare, the expiration of tax cuts in the 2009 stimulus, the expiration of a group of policies known as “tax extenders,” and changes in the current policy on the death tax. The death tax, for example, is currently thirty-five percent with a $5 million exemption. It would jump to fifty-five percent with only a $1 million exemption.
The total is estimated to be $494 billion in higher taxes each year, unless Congress acts. The phrase “unless Congress acts” is what has everyone concerned. Does it look to you like members of Congress are ready and willing to reverse course in the midst of an election year? It appears to me that the President and Congress seem content to wait until the 11th hour to take action.
Their inaction is affecting the economy and job growth right now since individuals and businesses don’t know what to expect next year. I’m Kerby Anderson, and that’s my point of view.
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