Sunday will mark the start of the 100-day countdown to “Taxmageddon” – the date 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, 2013:
First Wave: Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for small business owners, families, and investors (later re-upped by President Obama and Democrat Congress in 2010). The following tax hikes will occur on January 1, 2013:
Personal income tax rates will rise on January 1, 2013. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which the majority 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 a new and 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 coming on January 1, 2013. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of taxable 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.
Middle Class Death Tax returns on January 1, 2013. The death tax is currently 35% with an exemption of $5 million ($10 million for married couples). For those dying on or after January 1 2013, 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 on January 1, 2013. The capital gains tax will rise from 15 percent this year to 23.8 percent in 2013. The top dividends tax will rise from 15 percent this year to 43.4 percent in 2013. This is because of scheduled rate hikes plus Obamacare’s investment surtax.
Second Wave: Obamacare Tax Hikes
There are twenty new or higher taxes in Obamacare. Some have already gone into effect (the tanning tax, the medicine cabinet tax, the HSA withdrawal tax, W-2 health insurance reporting, and the “economic substance doctrine”). Several more will go into effect on January 1, 2013. They include:
The Obamacare Medical Device Tax begins to be assessed on January 1, 2013. Medical device manufacturers employ 409,000 people in 12,000 plants across the country. This law imposes a new 2.3% excise tax on gross sales – even if the company does not earn a profit in a given year. Exempts items retailing for <$100.
The Obamacare Medicare Payroll Tax Hike takes effect on January 1, 2013. The Medicare payroll tax is currently 2.9 percent on all wages and self-employment profits. Starting in 2013, wages and profits exceeding $200,000 ($250,000 in the case of married couples) will face a 3.8 percent rate.
The Obamacare “Special Needs Kids Tax” comes online on January 1, 2013. Imposes a cap on FSAs of $2500 (now unlimited). Indexed to inflation after 2013. 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. This Obamacare cap harms these families.
The Obamacare “Haircut” for Medical Itemized Deductions goes into force on January 1, 2013. Currently, those facing high medical expenses are allowed a deduction for medical expenses to the extent that those expenses exceed 7.5 percent of adjusted gross income (AGI). The new provision imposes a threshold of 10 percent of AGI. Waived for 65+ taxpayers in 2013-2016 only.
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2013, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. These tax increases will be in force for BOTH 2012 and 2013. The major items include:
The AMT will ensnare over 31 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 31 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.
Full business expensing will disappear. In 2011, businesses can expense half of their purchases of equipment. Starting on 2013 tax returns, all of it will have to be “depreciated” (slowly deducted over many years).
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.
Don't be fooled...........this wasn't just an obama thingy. It just appears that way. This has been the goal for this country for decades and both the dems and reps have dirt on their hands. It's GLOBAL. Eventually, countries will not be independent of each other......there will be ONE global leader!! And they are all trying to position themselves for that position now!!!
Don't fall for the LAME STREAM MEDIA'S spin.........be it the left or the right............they are just huge media corporations trying to make big bucks.
.........the dems/reps have the same agenda, just a different way of getting there. They are just fighting for power and positioning in the new global government.
When the INSANE are running the ASYLUM In individuals, insanity is rare; but in groups, parties, nations and epochs, it is the rule. -- Friedrich Nietzsche
“How fortunate for those in power that people never think.” Adolph Hitler
Don't be fooled...........this wasn't just an obama thingy. It just appears that way. This has been the goal for this country for decades and both the dems and reps have dirt on their hands. It's GLOBAL. Eventually, countries will not be independent of each other......there will be ONE global leader!! And they are all trying to position themselves for that position now!!!
Don't fall for the LAME STREAM MEDIA'S spin.........be it the left or the right............they are just huge media corporations trying to make big bucks.
.........the dems/reps have the same agenda, just a different way of getting there. They are just fighting for power and positioning in the new global government.
As long as it's after December 21st 2012, it may not even matter.
Taxes will go back to where they were in the prosperous 90's under Clinton. After the GWB disaster, most Americans would LOVE to have the economy back to the successful Clinton years.
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
Taxes will go back to where they were in the prosperous 90's under Clinton. After the GWB disaster, most Americans would LOVE to have the economy back to the successful Clinton years.
LOL - only Obummer (and Carter) could make Clinton look good.
Taxes will go back to where they were in the prosperous 90's under Clinton. After the GWB disaster, most Americans would LOVE to have the economy back to the successful Clinton years.
Really?...What new and edgy industry is springing up?
In the 90's it was the PC, MS Windows, the internet and dot com. It was along the lines of the lightbulb, mass produced cars and the airplane.
That's what made the 90's epic.
"Approval ratings go up and down for various reasons... An example is the high post 911 support for GWB even though he could be said to be responsible for the event." --- Box A Rox '9/11 Truther'
Melania is a bimbo... she is there to look at, not to listen to. --- Box A Rox and his 'War on Women'
Taxes will go back to where they were in the prosperous 90's under Clinton. After the GWB disaster, most Americans would LOVE to have the economy back to the successful Clinton years.
No, they won't... the only thing that will expire is the Bush tax cuts. With the additional taxes, it will be more.... Which, if it was combined with MEANINGFUL spending cuts, would be a good thing long term... but this is just kicking the can down the road.
"Arguing with liberals is like playing chess with a pigeon; no matter how good I am at chess, the pigeon is just going to knock out the pieces, crap on the board, and strut around like it is victorious." - Author Unknown
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
Box, and you talk about others putting up posts from non-news sites....
This site is run by a physician in California and a physicist in Minnesota...
"Arguing with liberals is like playing chess with a pigeon; no matter how good I am at chess, the pigeon is just going to knock out the pieces, crap on the board, and strut around like it is victorious." - Author Unknown
No, they won't... the only thing that will expire is the Bush tax cuts. With the additional taxes, it will be more.... Which, if it was combined with MEANINGFUL spending cuts, would be a good thing long term... but this is just kicking the can down the road.
But can you call them the 'Bush tax cuts' anymore?....I mean they have been in effect for over a decade now.
Wouldn't you call it the 'Standard" tax rate by now?
"Approval ratings go up and down for various reasons... An example is the high post 911 support for GWB even though he could be said to be responsible for the event." --- Box A Rox '9/11 Truther'
Melania is a bimbo... she is there to look at, not to listen to. --- Box A Rox and his 'War on Women'
But can you call them the 'Bush tax cuts' anymore?....I mean they have been in effect for over a decade now.
Wouldn't you call it the 'Standard" tax rate by now?
That's certainly arguable...but then you have to admit you are raising taxes...
"Arguing with liberals is like playing chess with a pigeon; no matter how good I am at chess, the pigeon is just going to knock out the pieces, crap on the board, and strut around like it is victorious." - Author Unknown
How the Romney and Obama tax plans stack up next to each other:
Based on the details Romney has provided so far, his plan would lower tax rates for the top quintile by 5.4 percent, saving the wealthiest an average of $16,134. (The top 1 percent of earners, meanwhile, would save an average of $149,997.)
The Important part: The lowest fifth of earners, by contrast, would see a small tax increase of 1.3 percent under Romney’s plan, owing the federal government an additional $143 extra on average.
Right there in black and white... tax the poorest Americans to give the Richest a tax cut of $150,000.00. Splain this one to me?
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
Economic times are different now and prosperity as we knew it may never return for a long time. There was also the dotcom bubble that blew up during those years too.
Economic times are different now and prosperity as we knew it may never return for a long time. There was also the dotcom bubble that blew up during those years too.
You're Correct. Economic times are different now... BECAUSE OF THE GEORGE WORST BUSH ECONOMIC MELTDOWN.
A vote for Mittens Romney is a vote for George Worst Bush. Continue on the Bush road of trickle down and help put the Bush agenda in office for a 3rd term!!!
The modern conservative is engaged in one of man's oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness. John Kenneth Galbraith
How the Romney and Obama tax plans stack up next to each other:
Based on the details Romney has provided so far, his plan would lower tax rates for the top quintile by 5.4 percent, saving the wealthiest an average of $16,134. (The top 1 percent of earners, meanwhile, would save an average of $149,997.)
The Important part: The lowest fifth of earners, by contrast, would see a small tax increase of 1.3 percent under Romney’s plan, owing the federal government an additional $143 extra on average.
Right there in black and white... tax the poorest Americans to give the Richest a tax cut of $150,000.00. Splain this one to me?
Based on what I see, Obama's plan increases taxes on eight of nine groups in the chart , and Romney decreases taxes on eight of the nine groups, and the group he does increase taxes on, it's an average of $2.75 a week....and the vast majority of this group pay NO net federal income taxes anyway, so what is changed? the size of their negative tax refund??
"Arguing with liberals is like playing chess with a pigeon; no matter how good I am at chess, the pigeon is just going to knock out the pieces, crap on the board, and strut around like it is victorious." - Author Unknown
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