Barring any legislation to the contrary, the largest tax increase in American history coming in January!
If you thought that the only people in danger of tax increases planned by Congress were rich – think again!
Buckle your seat belts and hold on for the plunge the economy will take when government grabs a lot more money from the poor, the middle class, businesses… and yes… the investor class.
As Ryan Ellis of Americans for Tax Reform painstakingly details below, every part of the American family is about to get socked with big – really big – tax increases. Not only will every rate go up but every employee with company provided health care will discover next year that the value of those benefits will be added to annual income totals by the IRS!
That’s right. You get to pay income taxes on the value of your health care benefits on top of higher rates, reinstitution of the marriage penalty and a loss of deductions for a range of costs including tuition costs, student loans interest payments and health savings accounts!
You don’t need an advanced degree in economics to predict what will happen to our already struggling economy when so much more money is taken from the American economy—and our pockets—to pay for federal government spending (including shiny new luxury jets for Congressional junkets!).
Hopes for new employment from small businesses will also be dashed when new rules require far higher costs from businesses to comply with absurdly increased new paperwork requirements, when investments are taxed at a dramatically higher rate and when most small businesses see their tax rates skyrocket.
The FairTax remains the best researched and most popular alternative to the destructive income tax and headlong rush toward a national economic cliff. Far short of the citizen support to force such a change on Washington, however, our campaign must reach out to every neighbor, friend, colleague and stranger with a positive message of hope, economic improvement, full employment and fiscal restraint.
The FairTax is good for all – not just investors, one party or another. Take the FairTax message now and share it with your most vexing political opponents, with candidates and with friends because without this sea change we’re about to suffer a tax tsunami.
Six Months to Go Until The Largest Tax Hikes in History
From Ryan Ellis on Wednesday, July 7, 2010 5:27 PM
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.