Tax increases are coming, thanks obamma and rest of democrat led congress

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Is this the fault of Obama, or the fault of Bush and the republicans for passing faulty legislation in the first place?
 
I wonder why the lead story on network news last night was of the continuation of tax breaks?
 
I received notice yesterday in the mail that my monthly health insurance cost was going up $100.

:mad:
 
stinkcat_14 said:
Is this the fault of Obama, or the fault of Bush and the republicans for passing faulty legislation in the first place?
Click to expand...
Don’t blame Bush. The Dems have had 4 years in congress and 2 in the White House to fix it. When does it stop becoming the last guy’s fault? Plus, this President isn’t helping with the increase in spending.

Increasing taxes during a recession is a pretty dumb move. But they’ll use that money for another stimulus or for another private jet to Copenhagen for Ms Pelosi.
 
Under President Bush’s stewardship, our nation went from large tax surpluses to large tax deficits. Mr. Bush paid for our conflicts in Iraq and Afghanistan with our national credit card as well as cutting taxes during a time of war, which was unprecedented in American history. He also championed, and signed into law, the incredibly expensive Medicare prescription drug benefit.

Then the economy collapsed, or damn near close to it. Mr. Bush opened up the national piggy bank to Wall Street and gave the people who nearly sent us into a second Great Depressiong $700 billion dollars of the tax payer’s money (much of which has been paid back, thank God).

Enter Mr. Obama. His administration inherited two unpaid for wars, a large deficit, and a national economic nightmare. His political position during the campaign was one of economic Keynesianism: higher taxes, more spending by the government to keep the economy afloat during the Great Recession. People voted for him, and for his party, on that platform. Mr. Obama has added, significantly, to the national debt with no end in sight by enacting a large stimulus (widely viewed as staving off even worse financial calamity) which included tax cuts. And then, of course, Obamacare, which is unimaginably expensive.

Our stalwart Republicans have been howling over the deficits (although they didn’t make a peep when Bush was running up deficits). Now the Bush tax cuts are set to expire. If they are kept in place, there will be even larger deficits. That’s just reality. The private sector is not adding jobs. Banks are not loaning money. The rates of poverty, hunger, and homelessness are increasing in our country. There are 6 unemployed people for every one job opening.

We are in deep, deep trouble, and we are being led by complete idiots in Washington, Democrat and Republican. The past administration is as much to blame as the current one for our troubles. We the People are also to blame, for spending too much and being completely imprudent with our own finances.
 
I believe the only people who will see significant tax increases are those making more than $250,000/year.

Who here makes that much?
 
Does your employer pay any of your health care costs? Do you contribute to a health care flexible spending account? Do you purchase over-the-counter medications? Are you currently able to itemize deductions for medical expenses? If so, you will be affected.

From Kiplinger:

The new health care reform law is chock-full of new taxes and tax increases that will affect many individuals and businesses, but it will be years before most of these hikes take a bite out of your – or your company’s – wallet. The law also has tax breaks to help both individuals and small businesses pay for insurance.

1. A new 10% excise tax on indoor tanning services on services provided after June 30, 2010.

2. The new law gives small firms tax credits as incentives to provide coverage, starting this tax year. Employers with 10 or fewer workers and average annual wages of less than $25,000 can receive a credit of up to 35% of their health premium costs each year through 2013. The credit is phased out for firms larger than that and disappears completely if a company has more than 25 employees or average annual wages of $50,000 or more.

Beginning in 2014, the system changes. The law requires each state to establish a health insurance exchange – a marketplace where individuals, the self-employed and small businesses can buy health insurance coverage. The government-regulated exchanges would offer insurance policies with different levels of coverage and price tags. Small firms that sign up with one of the health exchanges to be created can receive a credit of up to 50% of their costs – with the same phaseouts for average income and size as the earlier program. The credit disappears after 2015.
  1. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011. The amount reported is not considered taxable income.
  2. Elimination of a deduction employers now take for providing Medicare Part D prescription drug coverage to their retirees to the extent that the federal government subsidizes the coverage. This will not take effect until 2013.
  3. Doubling the penalty for nonqualified distributions from health savings accounts, to 20%, beginning in 2011.
  4. A limit on the amount that employees can contribute to health care flexible spending accounts to $2,500 a year, but the cap won’t take effect until 2013. This was previously left to the employer’s discretion, with many firms choosing a limit of $4,000 to $5,000 or so
  5. A ban on using funds from flexible spending accounts, health reimbursement arrangements or health savings accounts for the cost of over-the-counter medications, starting in 2011.
  6. Starting in 2013, a 0.9% Medicare surtax will apply to wages in excess of $200,000 for single taxpayers and over $250,000 for married couples. Also, for the first time ever, a Medicare tax will apply to investment income of high earners. The 3.8% levy will hit the lesser of (1) their unearned income or (2) the amount by which their adjusted gross income exceeds the $200,000 or $250,000 threshold amounts. The new law defines unearned income as interest, dividends, capital gains, annuities, royalties, and rents. Tax-exempt interest won’t be included, nor will income from retirement accounts.
    . 9. A hike in the 7.5% floor on itemized deductions for medical expenses to 10%, beginning in 2013. But taxpayers age 65 and over are exempt from the cutback through 2016.
  7. A new 40% excise tax, beginning in 2018, on high-cost health plans, levied on the portion that exceeds $10,200 for individuals and $27,500 for families. The provision is aimed mostly at gold-plated plans offered by employers, although it can affect individual policies
  8. A new tax on individuals who don’t obtain adequate health coverage by 2014 – this is often referred to as the individual mandate… The tax is to be phased in over three years, starting at the greater of $95, or 1% of income, in 2014, and rising to the greater of $695, or 2.5% of gross income, in 2016.
  9. Providing a refundable tax credit, once the individual mandate takes effect in 2014, to help low-income folks purchase coverage. To be eligible, a person’s household income must be between 100% and 400% of the federal poverty level, generally around $11,000 to $44,000 for singles and $22,000 to $88,000 for families. The credit is a sliding scale, based on income. Low-incomers get a credit for all costs. Then, as income rises, the credit phases out.
  10. A nondeductible fee charged to businesses with 50 or more employees if the firms fail to offer adequate coverage. The fee will equal $2,000 times the number of employees, though it won’t count the first 30 workers in that calculation.
    %between%
%between%
 
From Americans for Tax Reform:

In just -]six/-] three and a half 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:
Code: 
*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:
Code: 
**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.

*Second Wave: Obamacare*

There are over [twenty new or higher taxes in Obamacare](http://www.atr.org/obamacare-taxes-final-tab-a4744).  Several will first go into effect on January 1, 2011.  They include:

**The Tanning Tax.**  This went into effect on July 1st of this year.  It imposes a new, 10% excise tax on getting a tan at a tanning salon.  There is no exemption for tanners making less than $250,000 per year.

**The “Medicine Cabinet Tax” ** Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

**The HSA Withdrawal Tax Hike.**  This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

**Brand Name Drug Tax.**  Starting next year, there will be a multi-billion dollar tax assessment imposed on name-brand drug manufacturers.  This tax, like all excise taxes, will raise the price of medicine, hurting everyone.

**Economic Substance Doctrine.**  The IRS is now empowered to disallow perfectly-legal tax deductions and maneuvers merely because it judges that the deduction or action lacks “economic substance.”  This is obviously an arbitrary empowerment of IRS agents.

**Employer Reporting of Health Insurance Costs on a W-2.**  This will start for W-2s in the 2011 tax year.  While not a tax increase in itself, it makes it very easy for Congress to tax employer-provided healthcare benefits later.
 
Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. These major items include:
Code: 
**The AMT will ensnare over 28 million families, up from 4 million last year. ** According to the left-leaning [Tax Policy Center](http://www.taxpolicycenter.org/numbers/displayatab.cfm?DocID=2702), Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

**Small business expensing will be slashed and 50% expensing will disappear.** Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”

**Taxes will be raised on all types of businesses. ** There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but [there are many, many others](http://www.jct.gov/publications.html?func=startdown&id=3646).  Combining high marginal tax rates with the loss of this tax relief will cost jobs.

**Tax Benefits for Education and Teaching Reduced.  **The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.

**Charitable Contributions from IRAs no longer allowed. ** Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.
 
stinkcat_14 said:
Is this the fault of Obama, or the fault of Bush and the republicans for passing faulty legislation in the first place?
Click to expand...
The Democrats refuse to support the tax cuts unless they were restricted to 10 years. I don’t know how you can call legislation that allowed Americans to keep trillions of dollars of their own money faulty.
 
The Democrats would like to pass cap and trade in the next congress. That would raise costs for nearly everything. I call that a tax increase. Yes, the president wants to “fundamentally remake America,” and that means more taxes, higher prices, more government control.
 
estesbob said:
The Democrats refuse to support the tax cuts unless they were restricted to 10 years. I don’t know how you can call legislation that allowed Americans to keep trillions of dollars of their own money faulty.
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I thought I heard on a radio show (Thom Hartman) that the resaon it was limited to ten years is because, if it was enacted longer, the OMB would have projected that it would have increased the deficit.
 
TheTrueCentrist said:
I believe the only people who will see significant tax increases are those making more than $250,000/year.

Who here makes that much?
Click to expand...
Ever heard of an S corporation? Any money left at the end of the year is counted as personal income. Ever run a business? Ever had to keep three months of payroll expenses, workers compensation insurance premiums, money for purchasing of equiptment or equiptment repairs, etc. in an account, on the chance that there may be an economic downturn and you still need to pay your employees wages and healthcare premiums, without going to a bank, (who probably won’t lend you the money in this economy if you need it,) or without a government bailout? Ever priced out a piece of equiptment like a skidsteer or a dump truck, even a used one? Ever worried about your employees and their families if your savings take so big of a hit that you can’t afford to keep your business open.
Lots to think about isn’t there? Income isn’t that easily defined is it. But responsibility and good business practices is what keeps people employed, so they can pay their taxes, and have purchasing power, to keep others employed…and on and on!!
 
Even Yahoo! News (via the Associated Press) is reporting that the expiring tax cuts hit taxpayers at every level:
WASHINGTON – Here’s some pressure for lawmakers: If they don’t reach agreement on extending soon-to-expire Bush-era tax cuts, nearly all their constituents back home will get big tax increases.

A typical family of four with a household income of $50,000 a year would have to pay $2,900 more in taxes in 2011, according to a new analysis by Deloitte Tax LLP, a tax consulting firm.
Click to expand...
That’s on top of the $9,058 in income tax that is already being paid on a $50,000 income. So, that $50,000 income is now $38,042.

But wait, there’s more. Employees pay an addition 6.2% tax on that $50,000 for Social Security (i.e. $3100); self-employed workers also pay the employer’s 6.2% share (i.e. another $3100). So, that $50,000 income is now either $34,942 (for employees) or $31,842 (for self-employed).

Don’t forget Medicare taxes: 1.45% of employee’s income ($725), 2.9% of self-employed income (another $725). So that $50,000 income is now either $34,217 (for employees) or $33,492 (for self-employed).

Do the math: 1.2% tax on the first $7,000 for unemployment insurance tax, plus state and local income taxes (in most states), plus sales taxes, plus property taxes, plus city and county taxes for schools/hospitals/other services. The poverty level for families of 4, for all states (except Alaska and Hawaii) and for the District of Columbia is $22,050!

Some cities even collect income tax on not only residents but non-residents employed in the city – even when the non-resident works temporarily in the city. In 1992 the city of Philadelphia began enforcing the collection of city wage taxes on visiting baseball players who played games in Philadelphia.

Then there’s this example (from the New York State Department of Taxation and Finance Publication 88):
If you file a joint federal return and:
  • both spouses are nonresidents and both have New York source income, or
  • one spouse is a part-year resident and the other is a nonresident with New York source income, or
  • both spouses are part-year resident,
Click to expand...
you must file a joint New York State return using Married filing joint return as your filing status. Both spouses must sign the return and will generally be jointly and severally (individually) liable for the entire tax, penalty, or interest due.

Taxing the non-resident spouse of a part-year resident! No wonder 1.5 million, or 8 percent of its population, have left that state since 2000.
 
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