Are You Ready For Taxmageddon?
Thanks a lot, Congress. It looks like you’ve really stuck it to us again. This time, just sitting on your hands and doing nothing is going to cause the biggest tax increase in our Nation’s history.
On Feb. 18, The Washington Post reported:
On Dec. 31, the George W. Bush-era tax cuts are scheduled to expire, raising rates on investment income, estates and gifts, and earnings at all levels. … The Social Security payroll tax will pop back up to 6.2 percent from 4.2 percent… And new Medicare taxes enacted as part of President Obama’s health-care initiative will for the first time strike high-income households.
The potential shock to the nation’s pocketbook is so enormous, congressional aides have dubbed it “Taxmageddon.”
Taxmageddon won’t be the result of one massive new assault on our wallets. Instead, it will come from tax cuts expiring in seven categories, along with new tax increases taking effect because of Obamacare.
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Almost 34 percent of the tax increase from Taxmageddon comes from the expiration of the 2001 and 2003 Bush tax cuts. These cuts are best known for reducing marginal income tax rates, but they also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs.
In other words, they will impact just about everyone who pays any income taxes in this country.
We’re not talking about puny increases, either. Taxpayers at every level will be affected, with some of the greatest increases hitting people at the bottom of the ladder. For example, the lowest bracket is currently 10 percent. Beginning in January, it will jump to 15 percent — a 50 percent increase.
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