Three Great Waves of The Largest Tax Hikes in Our History

In just six months, on January 1, 2011, 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, here’s what happens:

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 only, there is no death tax. (It’s a quirk!) 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, a  business, a retirement account, could easily pass along a death tax bill to their loved ones.  Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money.  Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax.  Think about your own family’s assets.  Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million.  Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash!  That’s 55% of the value of the assets over $1 million!  Do you have that kind of cash sitting around waiting to pay the estate tax?

 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 not be used to pay for this type of special needs education.

The HSA (Health Savings Account) 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 IRAsand other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax (AMT) 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 currently 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  Read more: <http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#>; http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171##ixzz0sY8waPq1
And worse yet?
Now, your insurance will be INCOME on your W2’s! One of the surprises we’ll find come next year, is what follows – – a little “surprise” that 99% of us had no idea was included in the “new and improved” healthcare legislation . . . the dupes, er, dopes, who backed this administration will be astonished! Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that’s a private concern or governmental body of some sort. 

If you’re retired?  So what… your gross will go up by the amount of insurance you get.

You will be required to pay taxes on a large sum of money that you have never seen.  Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt.  That’s what you’ll pay next year. 

For many, it also puts you into a new higher bracket so it’s even worse.

This is how the government is going to buy insurance for the15% that don’t have insurance and it’s only part of the tax increases. Not believing this???  Here is a summary of the research:

On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001,
as modified by sec. 10901) Sec.9002  “requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income.”

– Joan Pryde is the senior tax editor for the Kiplinger letters.
– Go to Kiplingers and read about 13 tax changes that could affect you.  Number 3 is what is above.
 
=
 
 
 Reply Forward

Advertisements

Leave a comment

Filed under Uncategorized

Reasons to Vote Democrat

When your friends can’t explain why they vote for Democrats, give them this list.  They can then pick a reason.

10.  I vote Democrat because I believe oil companies’ profits of 4% on a gallon of gas are obscene but the government taxing the same gallon of gas at 15% isn’t.

9.  I vote Democrat because I believe the government will do a better job of spending the money I earn than I would.

8.  I vote Democrat because Freedom of speech is fine as long as nobody is offended by it.

7.  I vote Democrat because I’m way too irresponsible to own a gun, and I know that my local police are all I need to protect me from murderers and thieves.

6.  I vote Democrat because I believe that people who can’t tell us if it will rain on Friday can tell us that the polar ice caps will melt away in ten years if I don’t start driving a Prius.

5.  I vote Democrat because I’m not concerned about the slaughter of millions of babies through abortion so long as we keep all death row inmates alive.

4.  I vote Democrat because I think illegal aliens have a right to free health care, education, and Social Security benefits.

3.  I vote Democrat because I believe that business should not be allowed to make profits for themselves. They need to break even and give the rest away to the government for redistribution as the democrats see fit.

2.  I vote Democrat because I believe liberal judges need to rewrite the Constitution every few days to suit some fringe kooks who would never get their agendas past the voters.

1.  I vote Democrat because my head is so firmly planted up my ass that it is unlikely that I’ll ever have another point of view.
 
I’ll keep my Freedom, my God and my Guns… You keep the Change…
 
Get out and vote November 2nd, 2010!

Leave a comment

Filed under Uncategorized

Did Obama Inherit a Deficit Specifically from Bush?

 The Washington Post babbled again today about Obama inheriting a huge deficit from Bush. Amazingly enough, a lot of people swallow this nonsense. So once more, a short civics lesson.   

Budgets do not come from the White House. They come from Congress, and the party that controlled Congress since January 2007 is the Democratic Party. They controlled the budget process for FY 2008 and FY 2009, as well as FY 2010 and FY 2011. In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases.

For FY 2009 though, Nancy Pelosi and Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. At that time, they passed a massive omnibus spending bill to complete the FY 2009 budgets.

And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete FY 2009. Let’s remember what the deficits looked like during that period:    (below)

 
If the Democrats inherited any deficit, it was the FY 2007 deficit, the last of the Republican budgets.  That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets. If Obama inherited anything, he inherited it from himself.

In a nutshell, what Obama is saying is I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th!

Leave a comment

Filed under Uncategorized

The Global Situation on Illegal Immigration

If you cross the North Korean border illegally, you get 12 years hard labor. If you cross the Iranian border illegally, you are detained indefinitely. If you cross the Afghan border illegally, you get shot. If you cross the Saudi Arabian border illegally, you will be jailed. If you cross the Chinese border illegally, you may never be heard from again. If you cross the Venezuelan border illegally, you will be branded a spy, and your fate will be sealed. If you cross the Cuban border illegally, you will be thrown into political prison to rot. If you cross the US border illegally, you get:

1 – a job

2 – a driver’s license

3 -social security card

4 – welfare

5 – food stamps

6 – credit cards

7 – subsidized rent or loan to buy a house

8 – free education

9 – free healthcare

10 – a lobbyist in Washington

11 – billions of dollars of documents printed in your native language

12 – and the right to carry your flag as you protest you don’t get enough respect while here illegally in the US

I just wanted to make sure I had a firm grasp on the situation.

Leave a comment

Filed under Uncategorized

Barack’s Bullshit Bingo

 Here is something to help make Obama’s speeches almost tolerable. Just print out this page, distribute it to friends, and listen… (be sure to read directions at the bottom)

Rules for Bullsh*t Bingo:

1. Before Barrack Obama’s next televised speech, print your “Bullsh*t Bingo”
2. Check off the appropriate block when you hear one of those words/phrases.
3. When you get five blocks horizontally, vertically, or diagonally, stand up and shout “BULLSH*T!” [or shout out “PELOSI” (means the same thing)]
Testimonials from past satisfied “Bullsh*t Bingo” players:

“I had been listening to the speech for only five minutes when I won.” – Jack W., Boston 

“My attention span during speeches has improved dramatically.” – David D.,   Florida 

“What a gas! Speeches will never be the same for me after my first win.” – Bill R., New York City 

“The atmosphere was tense in the last speech as 14 of us waited for the fifth box.” – Ben G., Denver

1 Comment

Filed under Uncategorized

Pelosium

A major research institution has just announced the discovery of the densest element yet known to science.  The new element has
been named Pelosium.  Pelosium has one neutron, 12 assistant neutrons, 75 deputy neutrons, and 224 assistant deputy neutrons, giving it an atomic mass of 311.

These particles are held together by dark forces called morons, which are surrounded by vast quantities of lepton-like particles
called peons. The symbol of Pelosium is PU. Pelosium’s mass actually increases over time, as morons randomly interact with various elements in the atmosphere and become assistant deputy neutrons within the Pelosium molecule, leading to the formation of isodopes.

This characteristic of moron-promotion leads some scientists to believe that Pelosium is formed whenever morons reach a certain
quantity in concentration.  This hypothetical quantity is referred to as Critical Morass.

When catalyzed with money, Pelosium activates CNNadnausium, an element that radiates orders of magnitude more energy,
albeit as incoherent noise, since it has half as many peons but twice as many morons as Pelosium.

Leave a comment

Filed under Uncategorized

Barack Obama is Not the Root of Our Problem…

“The danger to America is not Barack Obama but a citizenry capable of  entrusting a man like him with the presidency. It will be easier to limit and undo the follies of an Obama presidency than to restore the necessary common sense and good judgment to an electorate willing to have such a man for their president. The problem is much deeper and far more serious than  Mr. Obama, who is a mere symptom of what ails us. Blaming the prince of  the fools should not blind anyone to the vast number of fools that made him their prince.  The republic can survive a Barack Obama. It is less likely to survive a multitude of fools such as those who made him their president.”

 — Author Unknown

Leave a comment

Filed under Uncategorized