Tax People - Any Truth to This?

[Perchoutofwater]

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... (read it to the end, so you see all three waves)...

 

 

 

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 highermarginal 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.

 

 

 

 

 

 

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 . . . those 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 research of the summaries.....

 

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."

 

I know the tax on employer provided insurance plans is only for the "Cadillac" plans. I've looked on the left leaning Snopes and Politfact, and both say this is false, but they base calling it false due to the only "Cadillac" plans being taxed. They don't even address the other items raised. Does anyone know about the rest of the items?

[i_am_the_swammi]

Its right-wing rhetoric...but like you, I could find no links.

 

I do know that to classify the expiring tax as a tax hike is pure propaganda. Kinda like saying that an item that was once on-sale is now expensive because the price went back to normal.

[gbpfan1231]

Its right-wing rhetoric...but like you, I could find no links.

 

I do know that to classify the expiring tax as a tax hike is pure propaganda. Kinda like saying that an item that was once on-sale is now expensive because the price went back to normal.

When was the last time an item was on sale for years? Will we be paying more in taxes in 2011 than we have in the past few years because of this? The answer is yes.

[wiegie]

Will we be paying more in taxes in 2011 than we have in the past few years because of this? The answer is yes.

Yes, and if you have a problem with it, blame the people who included the sunset provision in the original tax cut acts.

[Atlanta Cracker]

The problem is there is no appetite for tackling tough issues with any sort of permanent solution. So, in all likelihood there will be 1 year fixes passed for some if not all of the issues listed. AMT is the biggie that keeps getting pushed back year after year. Any long term fix would cause huge deficits to be projected so it's just skirting the system by passing one year measures year after year rather than addressing income \ expense imbalance on any sort of permanent measure.

 

The reason? Someone if not everyone has to give up something - less handouts, more taxes, or some combination of the two. Politically nobody is willing to tackle that.

[yo mama]

a lot of it is true... assuming Congress does nothing. But the republicans are PURPOSEFULLY doing nothing so they can ape about how the Democrats "raised taxes." That's right: part of the reason we'll all pay more in taxes is so that Republicans can make a political issue out of a problem they themselves choose not to fix. Isn't that cute? They should all be flogged.

[Boilerduff]

Dumbest thing you can do is raise taxes in a down economy. Believing this isn't a huge tax increase on small business and a redistribution of wealth is liberal kool aid drinking at it's finest. Oh, but let's pass the small business bill which sounds good, but doesn't actually help businesses, unlike these tax provisions. Hit'em in the head with the left, and pretend to pat them on the back with the right.

 

Letting these tax provisions die off is going to be very bad for the economy and business.

[SEC=UGA]

The one I am most pissed about is the estate tax... Worst part of it is that it destroys private businesses and that is of no help to anyone. Buncha freaking thieving bastards, you've already taxed that money, leave it alone!!!!!

[The Irish Doggy]

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.

 

Thanks GOP!

[westvirginia]

Thanks GOP!

 

Yes, the GOP were idiots to let the dems put in sunset provisions to avoid a filibuster. Lemme ask you this - what's to keep the dems from, at least, adding 2 years to the sunset provision right now? It kicks the can down the road, the GOP couldn't stop it, and it would be nothing but good press for the dems?

 

None of these idiots can get out of their own damn way. They should all be boiled in their own juices.

[SayItAintSoJoe]

Yes, the GOP were idiots to let the dems put in sunset provisions to avoid a filibuster. Lemme ask you this - what's to keep the dems from, at least, adding 2 years to the sunset provision right now? It kicks the can down the road, the GOP couldn't stop it, and it would be nothing but good press for the dems?

 

None of these idiots can get out of their own damn way. They should all be boiled in their own juices.

 

 

I thought these cuts were passed via reconsiliation.

[bushwacked]

I've looked on the left leaning Snopes and Politfact,

 

 

What makes these sites left leaning above and beyond the fact they legitimately debunk the chain emails and talking points you are so fond of?

[SEC=UGA]

What makes these sites left leaning above and beyond the fact they legitimately debunk the chain emails and talking points you are so fond of?

 

[i_am_the_swammi]

whoops...looks like someone on the right doesn't want to aid small business, for fear it will make the dems look good. Pathetic.

 

Obama: GOP should let small business bill through

 

WASHINGTON – President Barack Obama exhorted Congress on Monday to make passage of a long-languishing small business aid package its first order of business when it returns next month from its summer break.

 

"I ask Senate Republicans to drop the blockade," Obama said in the Rose Garden after meeting with his economic advisers.

 

Acknowledging that the economy still remains extremely fragile, the president said he'd also have other specific ideas in the days ahead.

 

He mentioned extending Bush tax cuts due to expire this year for households making under $250,000 a year, upping the nation's investment in clean energy, rebuilding more roads and highways and tax cuts designed to keep jobs in the United States.

 

"My economic team is hard at work identifying additional measures that could make a difference in both promoting growth and hiring in the short term and increasing our economy's competitiveness in the long term," he said.

 

White House spokesman Robert Gibbs later said that in addition to initiatives already unveiled that are bogged down in Congress, the administration would roll out a variety of targeted measures designed to spur the economy and create an environment conducive to hiring.

 

None of the measures will be as major as last year's stimulus bill, Gibbs said. "There's only so much that can be done," he added.

 

"Those in America are frustrated. Those in the West Wing are frustrated" about the slow pace of recovery and an unemployment rate hovering near 10 percent, Gibbs said.

 

In a week likely to be dominated by foreign policy, Obama is trying to show he's still minding the economy after his 10-day vacation in Martha's Vineyard.

 

A string of weak economic reports in recent weeks has fed fears that the economy would fall back into recession, only slightly offset by Monday's government report that consumer spending had increased in July after four down months.

 

"Every single day, I'm pushing this economy forward, repairing the damage that's been done to the middle class over the past decade and promoting the growth we need to get out people back to work," Obama said in his statement.

 

Obama said action on the package of small business tax cuts and credit incentives is "one thing we know that we should do" as soon as possible. Republicans have been blocking the bill, calling it misguided.

 

However, Obama said it was being "held up by a partisan minority that won't even let it get to a vote."

 

"The bill is fully paid for. And there's no reason to block it besides pure partisan politics," he said.

[Perchoutofwater]

whoops...looks like someone on the right doesn't want to aid small business, for fear it will make the dems look good. Pathetic.

 

If the dems really wanted to do this, they don't need GOP support, so what is your point? Any idea what might be in the proposals that the GOP is taking exception to?

[yo mama]

I thought these cuts were passed via reconsiliation.

Someone has bingo!

 

The Bush tax cuts WERE passed via reconciliation. That's why they couldn't last longer than 10 years.

[i_am_the_swammi]

Whatever blow-hole... did you once stop to think that their are provisions within this bill that are not aimed directly at helping out small businesses and that in many cases the negligible benefits that are offered aren't robust enough to counter the pork and other diaper dirt that they've loaded into this legislation... Have ya, hmmm, have ya?!?!?!?

 

Nice retort. It has been pointed out numerous times that once people resort to name-calling in a debate, it usually means they realize they have very little left to offer.

 

Thanks for playing ...look forward to seeing you in the next thread....hopefully it will be about something you have a little more expertise in so you don't embarrass yourself in front of everyone

[Perchoutofwater]

What makes these sites left leaning above and beyond the fact they legitimately debunk the chain emails and talking points you are so fond of?

 

You mean aside from the fact that they say that something is untrue based on one part of it being somewhat misleading, yet never addressing the other points?

 

Who owns snopes?

[yo mama]

You mean aside from the fact that they say that something is untrue based on one part of it being somewhat misleading, yet never addressing the other points?

 

Who owns snopes?

snopy?

Edited August 30, 2010 by yo mama

[bushwacked]

yet never addressing the other points?

 

Speaking of which, you have an illegal roster in Huddler's Glory that needs to be addressed.

[Azazello1313]

it's kinda funny how 7 years ago, when people on the left talked about the bush tax cuts, the only part that mattered were the cuts to evil greedy rich people. the rest was so piddling a token gesture as to not even be of consequence. now, it's "hey, obama wants to extend ALL of it well except for the cuts to rich people".

 

it's also kind funny to hear the argument that it's the republicans' fault that the democrats are killing the bush tax cuts, because the republicans are the ones who sunsetted them.

 

now if you were to criticize the republicans for sunsetting them simply in order to get a better (but phony) CBO score on the legislation, you would have a great point, that is absolutely what they did and it sucks. good thing that BS never happens anymore!

[bpwallace49]

I know the tax on employer provided insurance plans is only for the "Cadillac" plans. I've looked on the left leaning Snopes and Politfact, and both say this is false, but they base calling it false due to the only "Cadillac" plans being taxed. They don't even address the other items raised. Does anyone know about the rest of the items?

 

You forgot the last part of that quoted area

 

"If you care about America and want to get rid of the secret closet m00slim Obamessiah, forward this to seven friends in the next 5 minutes"

 

Having the tax rates go back to what they were under Ronald Reagan is a bad thing? It would be nice if these were realistically combined with items Rand Paul brought up . . mainly massive cuts to bloated areas of gubmnet so that we can actually start tackling the deficit instead of pushing it off into infinity . . .

 

and at people complaining about WHY they are expiring. They are expiring because that was the only way they could be pushed through by reconciliation and still ATTEMPT to balance the budget for the future (that last statement is hilarious . . cause no politicans care about the future only the next election matters) The only way they could have had the cuts, was to put a 10 year timeframe on them. Makes Bush look awesome . . but then they expire after he gets out of office.

 

The part about poor old ma and pa losing the family farm is especially disingenuous . . as that is such a small de minimus amount of who it actually effects. I dont agree with everything in the whole "death tax", but the objective to have generations EARN their money instead of re-establishing a comtinuous loop of inherited wealth is kinda the American way . . isnt it? Everyone has the OPPORTUNITY to succeed through hard work, and not simply because their parents were rich? They have the OPPORTUNITY to make something of themselves, and "supposedly" there are no social classes?

[Azazello1313]

Having the tax rates go back to what they were under Ronald Reagan is a bad thing?

 

I know you're just following obama's own talking point, but that is pretty freaking dishonest, trying to in any way associate reagan's name with higher marginal tax rates. if you look at this, the top marginal tax rate when reagan took office was 70%. then they were methodically lowered over the next several years until it was 28% when he left office.

[Perchoutofwater]

The part about poor old ma and pa losing the family farm is especially disingenuous . . as that is such a small de minimus amount of who it actually effects. I dont agree with everything in the whole "death tax", but the objective to have generations EARN their money instead of re-establishing a comtinuous loop of inherited wealth is kinda the American way . . isnt it? Everyone has the OPPORTUNITY to succeed through hard work, and not simply because their parents were rich? They have the OPPORTUNITY to make something of themselves, and "supposedly" there are no social classes?

 

It happens more than you think. I know we've had to jump through all types of hoops to try to insulate ourselves from the death tax. You see our bonding capacity is directly related to our assets, and when our bonding capacity is lowered, that means you've pretty much put a ceiling on how much work we can do. If we are set up to do $80 Million a year and because of this tax we can only bond $60 Million a year that is going to make it real hard to continue doing business the way that we have in the past. I know the death tax is truly a killer for most construction companies. We've taken all kinds of steps to insulate ourselves from this tax, but those have been costly steps where the money could have been used to improve our business rather than safeguard it from the government.

[bpwallace49]

I know you're just following obama's own talking point, but that is pretty freaking dishonest, trying to in any way associate reagan's name with higher marginal tax rates. if you look at this, the top marginal tax rate when reagan took office was 70%. then they were methodically lowered over the next several years until it was 28% when he left office.

 

Az . . follow your own link. Did you also notice what the column on the right side means? While it was reduced . . you are exactly right on that . . it also lowered the threshold of taxable income from 215K when he took office and it was 70% and reduced it to 29,700 when he left office and it was 28%.

 

Does that mean anything to this discussion? That while the tax rate fell, it was just shifted more to the middle class versus the very wealthy? The top tax rate applied to people that made over 215K in 1980 (which was pretty damn wealthy back then . . but 70% was still too high, imo) and then the tax rate was "lowered" by applying it to a lot more people . mainly everyone that made over 30k when Reagan left office.

 

All it did was shift the same tax burden backwards by including more people in that same rate . . . right? and why would it be wrong to apply that same rate again? Is it because trickle down economics worked very well? Seriously asking your opinion on this Az . . . so please try to refrain from a snarky reply.

 

Or am I reading that chart you linked to incorrectly?