Who said their taxes wouldn't go up?

[Guest 6.8 AR]

Six Months to Go Until<br> The Largest Tax Hikes in History

Six Months to Go Until

The Largest Tax Hikes in History

From Ryan Ellis on Thursday, July 1, 2010 4:15 PM

BREAKING: Wounded Warriors Face New Tax This Independence Day

In just six months, 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:

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, there is no death tax. 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 and a retirement account could easily pass along a death tax bill to their loved ones.

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 be used to pay for this type of special needs education.

The HSA 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 IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax 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 “depreciateâ€) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.â€

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.

Read more: Six Months to Go Until<br> The Largest Tax Hikes in History

Think again.

[Raoul]

What a surprise. I can't wait until next year when I have to generate 1099's for any business purchase over $600.00. I especially love the loss of education tax deductions. We certainly don't want an educated electorate that can deduce when BIGGOV is screwing us.

[Guest 6.8 AR]

I originally posted this because someone around here said their taxes weren't

going to go up. They may not have been paying attention to our turmoil in DC.

I thought it was interesting someone's head would be that deep in the sand

because the only way the taxes wouldn't go up would be if you quit or lost

your job. I am surprised about the lack of comments and lack of outrage over

this. Creeping communism... the cost of paying for despotism.

[greenego]

Only those that make more then $250,000 will pay higher taxes. Just in case you don't make that much here is a link for a card that will get you out of paying any new taxes.

https://www.atr.org/card.html?content=5140

[Garufa]

So are these actual tax "hikes" or a return to levels before Dubya, when taxes where slashed and spending spiraled out of control (again).

Not trying to start a ruckus, am really just wanting to know. Depending on whose voodoo economics you believe, the books were balanced 10 years ago.

[Guest 6.8 AR]

So are these actual tax "hikes" or a return to levels before Dubya, when taxes where slashed and spending spiraled out of control (again).

Not trying to start a ruckus, am really just wanting to know. Depending on whose voodoo economics you believe, the books were balanced 10 years ago.

It really depends on you wish to call it. I say when the

Bush tax cuts passed, it lowered taxes. They should

have been permanent, though. Since they are expiring,

whatever you wish to call them, they are an increase.

The books have never been balanced since Andrew

Jackson, so I don't really consider anyone's voodoo

accounting.

There are new taxes related to the new health care

bill, also, and new taxes embedded in banking laws,

not to mention stuff like cap and trade if it passes.

[greenego]

So are these actual tax "hikes" or a return to levels before Dubya, when taxes where slashed and spending spiraled out of control (again).

Not trying to start a ruckus, am really just wanting to know. Depending on whose voodoo economics you believe, the books were balanced 10 years ago.

The United States has not had a balanced budget since 1957! | Geldpress

In September 27, 2000, CNN wrote that that:

the federal budget surplus for fiscal year 2000 amounted to at least $230 billion, making it the largest in U.S. history and topping last year’s record surplus of $122.7 billion.

I’m not sure where CNN finds their White House correspondents, but they obviously know nothing about government accounting. CNN is not the only clueless news narrators of course; MSNBC, The New York Times, ABC, CBS, USA Today and virtually every other national news agency got it wrong then, and continue to get it wrong today.

Here is a tip for the mainstream news agencies: when reporting on US government budgetary issues, check the source. The source I’m referring to is the US Government’s Treasury Direct website. For all the pilfering the US government does of the tax coffers, at least they are honest about it. They accurately and honestly report the largest accounting scandal in world history. CNN just doesn’t understand the numbers.

As of July 17, 2008, the current US Government Debt is nearly 9.518 Trillion dollars. From the Budget of the United States historical tables (pg 31), the United States tax revenue for fiscal year 2007 was only 1.86 Trillion dollars when the social insurance and retirement receipts are subtracted out. For those of you who think that your money is 100% safe in United States treasuries, consider the fact that the debt to revenue ratio of the United States treasury is over 5 to 1! (9.518 trillion total debt divided by 1.86 trillion in tax revenue).

Looking back, here are the historical US government debt numbers from 1986 through 2007:

Bill Clinton was president of the United States from 1993 to 2001 and although he made significant progress toward fiscal responsibility, he did not balance the budget. If you don’t believe me, (that means you CNN!), then kindly point out two consecutive years in the table above where the total US debt actually decreased from year to year.

Here is another view of some of the historical debt numbers, and the corresponding annual deficits. As you can see, the United States has not had a balanced budget since 1957, the year that Dwight Eisenhower was in office.

So how do CNN and so many others repeatedly and incorrectly report of budget surpluses? They simply do not comprehend the numbers. The US government debt is broken down and reported in 2 components:

• Debt held by the public
  
• Intragovernmental holdings
  

The number that matters is the TOTAL of the two components above!

Before going further, let’s take a step back and consider the analogy of an 4 member household. Jack and Jill are married and have two kids. Together they have a total income of $65,000, but expenses are high and they spend a total of $70,000 per year. The annual budget deficit of this household is $5,000, which they finance on 2 credit cards – Jack’s Visa and Jill’s Mastercard. During the past year year, Jack paid down his Visa balance by $1000 (surplus) but Jill increased the balance of the family mastercard by $6000 (deficit). CNN ignores the Mastercard and reports a $1000 budget surplus for the Jack and Jill family!

Back to the United States. Why do they separate the total US debt into two components – debt held by the public and intragovernmental holdings? It’s because the current demographics of the United States make it convenient for them to hide the truth of their Enron style accounting from the American Public:

In 1960 there were 5.1 workers paying into social security for every 1 worker collecting a benefit. That ratio is gradually declining and is expected to hit 2.1 workers per retiree by the year 2032. The current demographics of the United States are causing social security surpluses, but over time those surpluses will turn into deficits.

The social security surplus for fiscal year 2007 was $283 billion dollars. Rather then investing those surpluses for future retirees, as every other American pension system is required to do, the United States budget office “borrows†the surpluses and records them in an Enron style fashion as “intragovernmental debtâ€. This trick lowers the reported deficit on the “Debt held by the public†side and increases it on the “Intragovernmental debt†side (see VISA and Mastercard analogy above). The trick is also very effective in fooling CNN (not hard to do!), who only looks at easy to read one page reports such as the Joint Statement of Henry M. Paulson, Jr., Secretary of the Treasury, And Jim Nussle, Director of the Office of Management and Budget, on Budget Results for Fiscal Year 2007. But the trick will only work until the United States demographic time bomb completely explodes, and the social security surpluses turn into social security deficits. I’m very curious to see what new tricks the United States budget office comes up with when that happens!

According to the joint statement report, the fiscal year 2007 budget deficit was only $163 billion dollars. In actuality, when you add in the pilfered social security surplus of $283 billion, plus other United States pension system raids (other federal government worker retirement programs), the 2007 budget deficit was actually $500.7 billion dollars, and not the $163 billion dollars that news agencies report from the joint statement. The total US Government debt did increase by $500.7 billion dollars from September 2006 to September 2007. 1957 was the last time the United States recorded a true surplus, where the total outstanding debt decreases from year to year. Thank you Mr. Eisenhower! As for the CNN reported $230 billion surplus for fiscal year 2000, it was actually an $18 billion deficit. Although still in the red, that too is deserving of my thanks to Mr. Clinton. He may not have achieved balance but he came pretty darn close!

For additional reading, I recommend the following:

The National Debt of the United States 1941 to 2008, 2d ed by Robert E. Kelly

One Nation Under Debt: Hamilton, Jefferson, and the History of What We Owe by Robert E. Wright

[greenego]

The fact remains TAXES ARE GOING UP. One example you got kids under 17? You get a credit "Child Tax Credit" of $1000 for each. Starting next year its only $500. If you use tanning beds you are paying 10% more today that a few days ago. I just hope the Nov. elections will start to reverse this madness!

[Guest SUNTZU]

It really depends on you wish to call it. I say when the

Bush tax cuts passed, it lowered taxes. They should

have been permanent, though. Since they are expiring,

whatever you wish to call them, they are an increase.

The books have never been balanced since Andrew

Jackson, so I don't really consider anyone's voodoo

accounting.

There are new taxes related to the new health care

bill, also, and new taxes embedded in banking laws,

not to mention stuff like cap and trade if it passes.

Andrew Jackson...wasn't he the guy who kept the Second National Bank from getting a renewed charter (the forefather of the Federal Reserve)?

Second Bank of the United States - Wikipedia, the free encyclopedia

Federal Reserve System - Wikipedia, the free encyclopedia

[Guest 6.8 AR]

I seem to recall it that way:D

[Guest oldsmobile98]

This could not have been done without a team effort.

- The people at the Fed (Bernanke, Greenspan) who gave us significant inflation (soon hyperinflation).

- Congress, which ceded its "Power To coin Money, [and] regulate the Value thereof" and unlawfully gave it to the Fed. Bonus points for passing unnecessary and unconstitutional legislation, forcing through budgets to pay for that legislation, and exempting themselves from the consequences.

- Folks like Geithner and Rangel who didn't pay their taxes.

- The IRS.

- The bankers who took ridiculous risks because they knew they would get bailed out if the balloon went up.

- The states that took federal money and the strings that came with it.

- And lastly, we the people, who did not (and still will not) hold these folks accountable, even as they rob us.

Go team!

Edited July 12, 2010 by oldsmobile98

[MacGyver]

Come January we're going to be in a race to see which event can cause the bottom to drop out of the economy first. My money says it's going to be a lot worse than the first part of this recession/depression

[Guest 6.8 AR]

Come January we're going to be in a race to see which event can cause the bottom to drop out of the economy first. My money says it's going to be a lot worse than the first part of this recession/depression

That's what I think, too.

Also, the article by CNN is wrong about the 1957 date

by at more than decades. If you look at FDR and Social

Security, that undoes any budget balancing. And the fact

that deficit and debt are different, seems to throw some

people off. There has been almost always a federal debt

since Andrew Jackson. Deficit spending causes debt.

And Clinton's surplus budgets were caused by the

republican controlled congress.

Ronald Reagan said in his farewell speech that presidents can't cause deficits. That's up to congress

to appropriate funds, including deficits. The president

can only veto. He can propose a budget, but he can't

draft legislation. That's congress' job. Blame should

be properly placed.

In the case of Obama, the legislation isn't even being

written by congress. It's being written by some very

influential progressives for congress. Why else would

they not know what's in a 2000 us page bill?

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