Tuesday, October 5, 2010

Taxes to Rise, Unless...

The mighty Veronique de Rugy outlines several taxes that will go up unless the Bush tax cuts of 2001/2003 are extended before January 2011. Among them are:
  • The estate tax will return to pre-2001 levels, socking estates worth more than $1 million with a 55 percent tax.
  • The capital gains tax on most assets will jump from 15 percent to 20 percent.
  • Dividends currently taxed at 15 percent will skyrocket to individual tax rates that go as high as 39.6 percent.
  • The Making Work Pay tax break will cease to exist.
  • The Alternative Minimum Tax will hit the middle class for 2010 tax returns.
  • A slew of tax breaks that expired last year, including credits for research and development expenses and relief for college tuition, will not be available for 2010 tax returns.
  • The Child Tax Credit will revert from $1,000 to $500.
When combined with inaction on the Bush tax cuts affecting marginal rates, taxpayers would be hit with a tax increase that easily tops $4 trillion over the decade if all the tax issues are untouched. Next year’s increase alone would amount to over $200 billion, according to Republicans on the House Ways and Means Committee.
What Ms. de Rugy doesn't ask is: Why weren't these made permanent in the first place? To which the answer is sadly obvious: the Republicans who managed to get them passed didn't have enough guts to go all the way. Let's hope the new crop coming in this January will have more.

No comments: