The Taxman Cometh; Again!
LEE’S SUMMIT, DECEMBER 7, 2012 – Washington is abuzz about “Sticking It” to the top two percent. Obama refuses an $800 billion revenue increase “it’s too small, and the numbers don’t add up” because he will stand steadfast on increasing taxes for the top two percent – as if that would fix it all.
In July of 2010 this blog posted an article covering the Pre-Bush tax rates (click here) that will go into effect after the Bush era tax cuts expire. All of our taxes are going to increase dramatically.
Here’s a quick list of what we’ll see for the 2013 tax year.
- Lowest tax rate (mostly personal) up from 10% to 15% (50% increase)
- The 25% bracket goes up to 28% (12% increase)
- The 28% tax bracket climbs up to 31% (11% increase)
- The 33% tax bracket climbs up to 36% (9% increase)
- Top income tax rate (business and personal) up from 35% to 39% (11% increase)
- Marriage Penalty returns so working couples will pay more taxes than 2 single people.
- Child Tax Credit cut from $1,000 per child to $500 per child.
- Dependent care and adoption tax will be cut.
- Inheritance (Death) Tax returns with a top rate of 55%
- Capital Gains tax up from 15% to 20% (33% increase)
- Dividends tax will rise from 15% to 39.6% (164% increase)
- Alternative Minimum Tax rate is estimated to now reach out to 28 million families, where today it only affects the top 4 million income families.
Some of the tax deferrals we have are also going away as part of the Health care Reform Act:
- Health Savings Accounts – Eliminated plus increases in the penalty for early withdrawal from 10% to 20% (100% increase)
- Flexible Spending Accounts – Eliminated
- Flexible Spending Accounts for Special Needs Kids – capped at $2,500, there is no cap now.
- Health Reimbursement Accounts – Eliminated
And still the taxman is not done because he’ll also hit businesses – that’s the engine of our economy and right now of our recovery.
- Depreciation rules for small businesses are changing where they can no longer expense 50% of up to $250,000 in capital expenses. It drops down to 50% of $25,000.
- Elimination of R&D tax credits
Elections, we were told once, have consequences and this election will reach into every American’s pockets if the Bush-Era tax cuts are not extended.
Congressman Emanuel Cleaver is trying to feel out his constituents asking the following questions:
- Have you heard of the “fiscal cliff?
- Are you aware that middle class families could see their taxes increase by an average $2,200?
- Would you favor a plan to prevent taxes on middle class families from rising, by raising taxes on those earning more than $1 million per year?
- What is the most important priority you want to see protected during fiscal cliff negotiations (K-12 Education, Student Loans, Medicare & Social Security, Job Training and Unemployment Benefits, All of the above)?
I’m particularly taken by the third question. In my own words it reads like this: Would you have someone else pay your bills for you?
The fundamental problem in Washington is that they are using other people’s money (OPM) and now they want our support to take more money from others, higher in the economic ladder. Spending cuts in Washington are tantamount to “LOSS OF POWER” and no one likes to lose power.
The fiscal cliff is upon us, and the low tax era started by the Bush Tax cuts is about to come to an end; and Washington is arguing over how much new money to raise, and forgetting the issue is too much spending – or perhaps hoping we all forget that’s the true problem.
The Lee’s Summit Conservative