How The Expiring Bush Tax Cuts Affect You

To: VRWCmember

>> that simply wasn’t going to happen.

I hear that simplistic excuse frequently, but sorry, FRiend, I simply don’t agree. Have you studied the arm-twisting that went on to get the prescription drug bill passed? Had the (R)s employed anything like that single-minded focus on permanent tax cuts you bet your booty they would have been successful. It was simply not a priority. Part of the reason is, the focus WAS on pork-barrel spending, and yes, it’s embarrassing and hypocritical for a congresscritter to holler for tax cuts while wallowing waist-deep in earmarks.

>> Reagan ... tax cuts didn’t last either... he had to deal with the same democrat opposition that W did.

No, W did NOT have to deal with the “same” ‘rat opposition. Reagan accomplished his great things WITHOUT GOP control of Congress. On the other hand, W’s GOP had a slight-to-significant majority in BOTH houses of congress during most of his administration. To fail to capitalize on that majority, as he so often did, is inexcusable. And the focus of the GOP on pork and earmarks above the best interest of the country is similarly inexcusible.

40 posted on Thursday, July 08, 2010 9:41:53 PM by Nervous Tick (Eat more spinach! Make Green Jobs for America!)


To: Nervous Tick

Yes, the GOP is sorely lacking in principled conservative leadership. OTOH, W fought to get two rounds of tax rate cuts passed. The first round was not as effective as the second, because it was more demand side focused. But the second round got the lower tax rates across the board, and the lower capital gains rates that spurred investment and economic growth. Would PERMANENT rate cuts been better? Of course, but that simply wasn’t going to happen. Getting the lower tax rates that remained in effect for the duration of his presidency was a good start. He fought for extensions and fought to make them permanent but the dems (and some of the RINOs) blocked those efforts.

Reagan is the last great president we have had, but his tax cuts didn’t last either. And one of the compromises that he made with the dems in return for temporary rate reductions was the PERMANENT elimination of deductions for consumer interest (that previously benefited the middle class) because he had to deal with the same democrat opposition that W did.

35 posted on Thursday, July 08, 2010 9:29:32 PM by VRWCmember


To: Wpin

Read this a weep. Then let it become a motivator for this election cycle. We MUST get the job done THIS YEAR and complete it in the 2012 Presidential election.

Six Months to Go Until The Largest Tax Hikes in History
From Ryan Ellis on Thursday, July 1, 2010 4:15 PM

BREAKING: Wounded Warriors Face New Tax This Independence Day

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. 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.

PDF Version
Source: http://www.atr.org/sixmonths.html?content=5171

41 posted on Thursday, July 08, 2010 9:55:19 PM by GailA (obamacare paid for by cuts & taxes on most vulnerable Veterans, retired Military, disabled & Seniors)


To: Wpin
Good article!

The gutless, cowardly Repubs & gutless appeasing cowardly inept GW Bush should have made these tax cuts permanent when they had they controlled both houses of Congress & the Executive branch for SIX YEARS from 2000 - 2006. Instead the Repubs only talked about it for all eight years of GW Bush. Bumbling inept fools!

My understanding is that the DemoRATs will seek to extend a portion of the tax cuts, but only by attaching it as some amendment to some even more heinous piece of socialist legislation like amnesty for the illegals or Cap & Trade bill, thereby setting up the accusation to blame Republicans of failing to extend the tax cuts even though it is attached to some heinous socialist piece of legislation.
42 posted on Thursday, July 08, 2010 10:13:57 PM by rcrngroup