Middle Class Tax Increase Coming to a Family Near You
If President Obama can tear himself from corporate jets and "millionaires and billionaires," he might give a moment's thought to the tax hike coming for families fitting his own definition of middle class.
Bob Jennings, at Fox Business, reports:
In a recent tax planning meeting with one of our clients, we shocked them with what their income tax future looked like for 2013 if Congress continues to do nothing to provide a long-term permanent set of tax laws. They had no idea what tax breaks were expiring this year and next year, and how much it would cost them personally in extra income tax. But they aren’t alone, many Americans and even tax professionals aren’t aware that their tax bill could rise dramatically next year
Jennings goes on to describe the tax situation of a hypothetical married couple with two young children. The Smiths are a two-income family with combined wages of $100,000 per year. They owe money on student loans and a mortgage while earning about $1,000 in dividends each year on some inherited stock.
The expiration of the Bush tax cuts alone will cost the family $960 in 2013.
The loss of complete student loan deductibility will cost $840 and changes in child care deductibility will likewise add to taxes due. And the marriage penalty comes back.
In summary, because of tax laws expiring this year and next, we estimate that the Smiths will owe $3,598 more in income tax in 2013 than in 2011 with no change in their income.
Wow, with incentives to work, save and invest like these built into current law, and enormous budget deficits increasing the likelihood of more such down the line, I can't imagine why it isn't Morning in America right now.
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Comments :
Dec '10
Re: Middle Class Tax Increase Coming to a Family Near You
I can't see the pandering portions of the tax code expiring (credits, deductions, etc.), but it's hard to imagine the current rates being argued for again. One might think that after a decade or so such things would be considered permanent. What bothers me most about determining our tax code year to year is the implied concept that government is somehow acting contrary to its interests by allowing us to keep a little bit more of its money.
Aug '10
Re: Middle Class Tax Increase Coming to a Family Near You
Here's a suggestion for anybody talking to an OWSer that chants for an end to the Bush Tax Cuts: Ask that person to list them, specifically.
Dec '10
Re: Middle Class Tax Increase Coming to a Family Near You
To fiancee' as I hand her a key ring for a wedding band:
"Sorry, Honey, but if we marry it's gonna cost us our honeymoon, unless I cut back somewhere else."