Core_Models wrote
No one barely scraping by is going to be remotely affected by the expiration of the cuts that are going to be allowed to expire.
You sure about that Core.
Below is a pretty exhaustive list of the Bush tax cuts that could expire. My source is the Tax Foundation - http://www.taxfoundation.org/research/show/26062.html, and I will paste only to show list for this thread:
Below, see a selected list of the tax increases that could occur on January 1, 2011. These are only the most well known provisions of the Bush tax cuts that, if allowed to expire, would come to the immediate attention of the nation's taxpayers.
•The two "marriage penalty elimination" provisions will expire, so that:
â—¦The standard deduction for married couples will fall, no longer double what it is for single filers; and
â—¦The ceiling of the 15% bracket for married couples will fall, no longer double what it is for single filers
•The 10% tax bracket will expire, reverting to 15%
•The child tax credit will fall from $1,000 to $500
•The tax rate on long-term capital gains earned by middle- and upper-income people would rise from 15% to 20%
•The tax rate on qualified dividends earned by middle- and upper-income people would rise from 15% to ordinary wage tax rates
•The 25% tax rate would rise to 28%
•The 28% rate would rise to 31%
•The 33% rate would rise to 36%
•The 35% rate would rise to 39.6%
•The PEP and Pease provisions would be restored, rescinding from high-income people the value of some exemptions and deductions
•The estate tax would be restored with an exemption level of $1 million and rates that top out at 55%
The plan outlined in the Obama administration's budget is to allow only one of those 12 provisions to revert exactly to what it was in early 2001:
•The top tax rate will revert from 35% to 39.6%
Five of those dozen major provisions will change, but they won't go back to exactly what they were in 2001:
•Estate tax law will revert to 2009 instead of 2001: exemption of $3.5 million and top rate of 45%
•Rate on long-term capital gains will revert to 2001 law (rate of 20%) but only for couples with over $250,000 in AGI the year the gain is realized ($200K threshold for singles)
•Dividends will be taxed just like long-term capital gains
•The 33% tax rate will revert to 2001 law (rate of 36%) but the income threshold where that bracket starts will shift up to $250,000 in taxable income (couples) and $200,000 for singles
•The PEP and Pease provisions will be restored, rescinding from high-income people the value of some exemptions and deductions, but the income threshold where they start to pay more will shift up to $250,000 in taxable income (couples) and $200,000 for singles
The other 6 of the 12 major Bush tax cut provisions for individuals listed above will be preserved as enacted during the Bush years.
There are many other provisions that will expire, including EITC eligibility levels, education IRA provisions, and others, not to mention Obama's biggest tax cut, the making-work-pay credit, which was a one-year tax cut in 2009 that was renewed for 2010.
A more comprehensive list can also be found on the Tax Foundation website - http://www.taxfoundation.org/news/show/26010.html
Not to mention the "tax hikes for the rich" can have severe indirect effects on labor, equipment, and material investments for many businesses. I haven't even started talking about Obamacare's possible tax consequences in the future.
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