More taxes coming........

[brantc]

Is there anybody here who thinks this is a good thing???????

Three Devastating Tax
Waves Will Destroy Many
From Americans for Tax Reform


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%


<snip>

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.

The 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.


The 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.

<snip>

Now, your insurance will be INCOME on your W2's!


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."

___________
http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171#


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.

 

[drkitten]

Is there anybody here who thinks this is a good thing???????

Fallacy of complex question.

Some of them are very good ideas. Some of them are questionable but can be (and are being) hammered out.

One of them is outright bad, but it's already being dealt with at the Congressional level, which makes your source to be a liar.

 

[jimtron]

brantc:

What do you suggest should be done about taxes?

 

[paiute]

http://www.snopes.com/politics/taxes/HR3590.asp

 

[wastepanel]

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."

This statement is false.

http://www.snopes.com/politics/taxes/hr3590.asp

 

[sthomson]

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.

The 2001 and 2003 "tax cuts" actually increased my taxes - I wonder why no one mentiones that. Thanks Bush! Anyway, these expire every year unless they are renewed. They usually are. I am hopeful that this year, we do not renew the tax cuts on the wealthiest brackets. This would generate billions of dollars of revenue every year.

Given that this (I assume) chain email starts out with a whiz-bang of a factual error, I can't see why I should continue reading it.

 

[Dunstan]

Yes, we may return to the dark days of the mid-90s, when businesses were so oppressed by taxation that they could only manage 5% unemployment and 4% real GDP growth. Oh, the horrors!

 

[jimtron]

Also, calling the Estate Tax the "Death Tax" is not a good way to have an honest discussion about an issue.

And here's a very recent Paul Krugman column about continuing the Bush tax cuts:
http://www.nytimes.com/2010/08/23/opinion/23krugman.html

 

[Mister Earl]

Personal opinion: Taxes should be increased until the budget is balanced. This should be written into law. If people feel taxes are too high, then they can decide on where spending should be cut.

 

[geni]

Also, calling the Estate Tax the "Death Tax" is not a good way to have an honest discussion about an issue.

Well "Death duties" was the historical term at least in the UK but for some reason those opposed to them don't seem to use that term either.

 

[jimtron]

Personal opinion: Taxes should be increased until the budget is balanced. This should be written into law. If people feel taxes are too high, then they can decide on where spending should be cut.

Yes. For those opposed to current or proposed tax policies, tell us how to balance the budget with lower taxes, or where the tax burden should shift.

 

[wastepanel]

Personal opinion: Taxes should be increased AND SPENDING LIMITED until the budget is balanced. This should be written into law. If people feel taxes are too high, then they can decide on where spending should be cut.

Fixed that for you.

If you are altering a Member's post to make a "FTFY" style post please ensure that your alterations are very clear, see: http://www.internationalskeptics.com/forums/showthread.php?postid=6261308#post6261308 for more details.

Replying to this modbox in thread will be off topic  Posted By: Darat

 

[drkitten]

Fixed that for you.

Hardly a legitimate fix. One of the problems with budgeting that happens at any level from your household finance to the Principality of Ruthenia and beyond is that spending can't be limited. Unexpected events occur and need to be paid for.

Writing into law that "spending must be limited" is just asking for trouble when a hurricane hits East Dakota or a speeding glacier wipes Santa Seesyou, CA off the map. Disaster relief money needs to come from somewhere. You'll either need to break the law or change it. Or some Pastafarian extremist will drive a boat into the Sears Tower and you'll need to invade Italy.

 

[godless dave]

So returning to pre-Bush tax levels will be devastating to the economy? How come the economy wasn't devastated during the Clinton administration?

Yes, I do think it's a good thing.

 

[Mister Earl]

Fixed that for you.

That works, too. I think (And feel free to disregard anything I say here, I'm no economic expert!) that one of the big factors going on with budget issues and careless government spending is the disconnect between the taxpayer and what the money goes towards.

If we were, for example, to illegalize deficit spending, mandate all budgets be balanced (I'd even go so far as to recommend a small budget savings of sorts, in case of disasters, ect), then people, upon seeing the higher required taxes, would take an immediate interest in where their tax dollars are actually going. No budgetary addition would pass by unscutinized to the Nth degree.

 

[pgwenthold]

Hardly a legitimate fix. One of the problems with budgeting that happens at any level from your household finance to the Principality of Ruthenia and beyond is that spending can't be limited. Unexpected events occur and need to be paid for.

Writing into law that "spending must be limited" is just asking for trouble when a hurricane hits East Dakota or a speeding glacier wipes Santa Seesyou, CA off the map. Disaster relief money needs to come from somewhere. You'll either need to break the law or change it. Or some Pastafarian extremist will drive a boat into the Sears Tower and you'll need to invade Italy.

It doesn't make any sense, really. Why do you have to limit spending? I thought republicans were supporters of the free market and fiscal responsibility? If you don't want to raise taxes, you can always cut the spending. Nothing is stopping you.

But if you require that any spending is paid for, then that provides the incentive to cut spending. It's trickle down economics, right?

As an example, you might be more reluctant to start a second war knowing that you are going to have to pay for it.

 

[drkitten]

That works, too. I think (And feel free to disregard anything I say here, I'm no economic expert!) that one of the big factors going on with budget issues and careless government spending is the disconnect between the taxpayer and what the money goes towards.

If we were, for example, to illegalize deficit spending, mandate all budgets be balanced (I'd even go so far as to recommend a small budget savings of sorts, in case of disasters, ect), then people, upon seeing the higher required taxes, would take an immediate interest in where their tax dollars are actually going. No budgetary addition would pass by unscutinized to the Nth degree.

Yes, but that's unrealistic, frankly. Not even households abide by that standard, or you'd never be able to get a car or a mortgage. When people talk about deficit spending, they're generally talking about the government selling bonds to raise money now that they don't have in the current tax revenues. That's more-or-less exactly how my mortgage works; I can afford to live in a house that costs well more than my annual salary for some tiny fraction of my take home pay. The difference is that I will be buying one house but paying for it for thirty years.

And, frankly, deficit spending is good for the economy; on the macroeconomic level, it expands the money supply and encourages investment. In times of financial trouble (like the current times) deficit spending can even be a necessity. (This is true for households as well; if you don't have a dime in the bank, but your car needs $1000 worth of repairs, put it on the VISA card. That's a better option than losing your job because you can't get to work.)

And conversely, if the government did run a surplus,.... where would it put it? The government running a surplus would actually take money out of the economy and produce deflation,... which is bad. (It wouldn't be as bad right now, because the government could plough the current surplus into the accumulated long-term debt, but what happens when the debt is paid off and the surplus continues?)

Of course, you can have too much of a good thing, and deficit spending is one of those things you can have too much of. But that's true of water, too, as the Pakistanis are finding out.

 

[wastepanel]

Hardly a legitimate fix. One of the problems with budgeting that happens at any level from your household finance to the Principality of Ruthenia and beyond is that spending can't be limited. Unexpected events occur and need to be paid for.

Writing into law that "spending must be limited" is just asking for trouble when a hurricane hits East Dakota or a speeding glacier wipes Santa Seesyou, CA off the map. Disaster relief money needs to come from somewhere. You'll either need to break the law or change it. Or some Pastafarian extremist will drive a boat into the Sears Tower and you'll need to invade Italy.

Fixed spending can not be changed. Using the household budget as an example, (for the most part) spending can not be changed on fixed expenses (such as mortgage, minimum loan/credit card payments, etc.). Utilities can go down only slightly, but that's not where you get your savings from. A household budget must be able to fund its groceries, entertainment, clothes, etc. (which I'll refer to as variable expenses).

When I create my household budget, I look at what my household expected income and what my fixed costs are. I assume that utilities savings/rising are minimal, so I consider them fixed. That gives me my variable expense budget.

If I go above my variable expense budget, I'll have to put it on a credit card if I don't want to cut spending (or can't if it's an emergency). Any amount left over can go into savings, or left out for a special night or two.

I use this same philosophy when budgeting for companies. There's certain expenses that are just there. It's how you handle the variable expenses that make you solvent.

When it comes to government spending, everything is now an emergency. It's like me saying "I can't cut back on groceries! We need to eat!" when I spent $100 the night before drinking and $300 the day before on clothes for my kids. You have to look at all the expenses and put them into perspective.

There is a lot of waste in the government. If spending is cut and taxes raised, it will create a surplus. That surplus can be used to pay for things like speeding glaciers, paying down debt, and boat attacks. It just depends on what priority you set to this.

Paying down debt is very important, but you shouldn't leave yourself cash strapped for emergencies. A rainy day amount should be set aside (although politically bad) for extraordinary items. With this fund established, there won't be as much of a need for credit when emergencies arise.

 

[LibraryLady]

I'm paid with tax money. Guess I'm not the best person to ask.

 

[Dr. Keith]

Yes, we may return to the dark days of the mid-90s, when businesses were so oppressed by taxation that they could only manage 5% unemployment and 4% real GDP growth. Oh, the horrors!

My primary fear is that if we make a concerted effort we may have a real economy in place for the Republicans to screw up in another 6 years.