C'mon now, you didn't think this close to an election that I would have nothing of a political nature, did you? Though I will say that while this will have some political undertones (or overtones as the case may be,) I am going to consider its overarching goal as informational. Should it sway your vote to the right as well, even better.
My parents are visiting and my Dad and I were discussing some contract work he has done. I was telling him (again) to make sure he files his quarterly estimates so he doesn't get a fine or end up with an unexpected tax bill. He let me know that he was going to pay some of his tax bill with money he is owed now but he planned to defer until the new year, making it taxable income for 2011. At this point, gigantic red flags are going up and I told him that is the very last thing he wanted to do since everyone's taxes are going up when the Bush tax cuts expire.
Now, I generally consider my Dad, a computer programmer, to be a smart guy. But his response shocked me. He said he didn't need to worry about that since the Bush tax cuts had only helped people who made more than $200,000 and they were the only people facing a tax increase.
Whisky Tango Foxtrot.
So I became concerned. Clearly, he had been snowed by the mainstream media into thinking the tax increases were only on the "rich." How many other unsuspecting people did I know who were not aware of the taxation surprises that await them in 2011? Therefore, I am taking it upon myself to put a little truth out there for ya. I don't care if you like Bush, don't like Bush, or what side of the aisle you favor, what I am going to provide here are some non partisan cold, hard facts.
Everyone's Taxes Will Go Up if the Bush Tax Cuts Expire
There are currently six tax brackets: 10%, 15%, 25%, 28% 33%, and 35%. If nothing is done, the rates come January 1, 2011 will become: 15%, 28%, 31%, 36% and 39.6%. In case the numbers are not clear enough, this means every American who pays taxes has a rate increase.
Child Tax Credit Decreases
The per child deduction will drop from $1,000 to $500 and eligibility for the credit will become more stringent. Everyone who claims a child on their tax return will face an increased tax burden due to lesser deductions.
Capital Gains Tax Increase
The capital gains tax is currently between 0% and 15% depending on the income of the filer. Everyone can say goodbye to those rates as they rise to 20%.
The Marriage Penalty is Back!
The Bush tax cuts made the standard exemption for married filers twice that of a single filer. But come January, married couples will have an exemption that (per person) will be lower than single filers.
What does this mean for you? Duh. Higher taxes. Without a legislative intervention, we are all in for a bigger tax bill. Just something to think about as you head to the ballot box.
And if you need something else to think about, consider how the Democrats and the media have successfully convinced a large portion of the population that these were rich people's tax cuts when they clearly benefited all taxpayers. They were lying about it. Do we think they might be lying about some other things too?