Found this link in my last blog post. Had enough "Hope Hype and Change" yet????
"Six Months to Go Until
The Largest Tax Hikes in History
"In just six months, thelargest tax hikes in the history of America will take effect. They will hitfamilies and small businesses in three great waves on January 1,2011:
First Wave: Expiration of 2001 and 2003 TaxRelief
In 2001 and 2003, the GOP Congress enacted several tax cutsfor investors, small business owners, and families. These will all expire onJanuary 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 rateat which two-thirds of small business profits are taxed). The lowest rate willrise from 10 to 15 percent. All the rates in between will also rise. Itemizeddeductions and personal exemptions will again phase out, which has the samemathematical effect as higher marginal tax rates. The full list of marginalrate hikes is below:
- The 10% bracket rises to an expanded 15%
- The25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracketrises to 36%
- The 35% bracket rises to 39.6%
Higher taxes onmarriage and family. The “marriage penalty” (narrower tax brackets formarried couples) will return from the first dollar of income. The child taxcredit will be cut in half from $1000 to $500 per child. The standard deductionwill no longer be doubled for married couples relative to the single level. Thedependent care and adoption tax credits will be cut.
The returnof the Death Tax. This year, there is no death tax. For those dyingon or after January 1 2011, there is a 55 percent top death tax rate on estatesover $1 million. A person leaving behind two homes and a retirement accountcould easily pass along a death tax bill to their lovedones.
Higher tax rates on savers and investors. Thecapital 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.
There are over twenty new or highertaxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The “Medicine Cabinet Tax” Thanks toObamacare, Americans will no longer be able to use health savings account (HSA),flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollarsto purchase non-prescription, over-the-counter medicines (exceptinsulin).
The “Special Needs Kids Tax” This provisionof Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500(Currently, there is no federal government limit). There is one group of FSAowners for whom this new cap will be particularly cruel and onerous: parents ofspecial needs children. There are thousands of families with special needschildren in the United States, and many of them use FSAs to pay for specialneeds education. Tuition rates at one leading school that teaches special needschildren in Washington, D.C. (NationalChild 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 ofObamacare increases the additional tax on non-medical early withdrawals from anHSA from 10 to 20 percent, disadvantaging them relative to IRAs and othertax-advantaged accounts, which remain at 10 percent.
Third Wave: TheAlternative Minimum Tax and Employer Tax Hikes
When Americansprepare to file their tax returns in January of 2011, they’ll be in for a nastysurprise—the AMT won’t be held harmless, and many tax relief provisions willhave expired. The major items include:
The AMT will ensnare over28 million families, up from 4 million last year. According to theleft-leaning TaxPolicy Center, Congress’ failure to index the AMT will lead to an explosionof 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 atthe higher level. The AMT was created in 1969 to ensnare a handful oftaxpayers.
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 canexpense half of their purchases of equipment. In January of 2011, all of itwill have to be “depreciated.”
Taxes will be raised on all typesof businesses. There are literally scores of tax hikes on businessthat will take place. The biggest is the loss of the “research andexperimentation tax credit,” but there aremany, many others. Combining high marginal tax rates with the loss of thistax relief will cost jobs.
Tax Benefits for Education andTeaching Reduced. The deduction for tuition and fees will not beavailable. Tax credits for education will be limited. Teachers will no longerbe able to deduct classroom expenses. Coverdell Education Savings Accounts willbe cut. Employer-provided educational assistance is curtailed. The studentloan interest deduction will be disallowed for hundreds of thousands offamilies.
Charitable Contributions from IRAs no longerallowed. Under current law, a retired person with an IRA cancontribute up to $100,000 per year directly to a charity from their IRA. Thiscontribution also counts toward an annual “required minimum distribution.” Thisability will no longer be there. "