Home > democrats, obama > Taxes set to sky-rocket in 6 months

Taxes set to sky-rocket in 6 months

It's your money, not theirs.

Americans For Tax Reform authored a piece today that provides a reminder to everyone that the largest tax hike in history will hit January 1, 2011.  The entire piece is worth reading, but I decided to post the first source of tax increases: the Bush tax cuts expiring.

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.

Sounds great, huh?  Good job Dems.  Nothing stimulates an economy like less money in our pockets.  But hey, maybe after taking our money, the government will give us a little bit back, and then tell us it “cut taxes.”  That is the Obama Way after all.
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  1. it's me
    July 2, 2010 at 10:09 PM

    Well so much for having a nice holiday weekend, thanks a lot!

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