So, when are my taxes going up?

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
Each of the major parties has an economic model they trumpet as part of their agenda; for the Dems, they claim to be high taxes/high services, and for the GOP, they claim to be low taxes/low services. Of course these models are frauds in reality, because while both parties, when in power, rush to enact the popular parts of their agendas (low taxes for the GOP, and high services for the Dems), they never seem to get around to doing the unpopular stuff, cutting services or raising taxes. To the Dem's credit, they actually did raise taxes in '92, and promptly lost both chambers of Congress for the first time in ~40 years. Common sense would say then that having learned that painful lesson, what are the odds the Dems ever get around to raising taxes again to actually pay for their agenda? I've long said those odds are very, very slim - just like the GOP, the Dems will just continue to run deficits and kick the whole debt issue further down the road until we become a bigger version of Greece. Today, there's more evidence that's probably correct:

More Dems against tax hikes on the rich
http://www.usatoday.com/money/perfi/taxes/2010-09-02-democrats-tax-increase_N.htm

White House considers tax breaks for businesses
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/02/AR2010090204235.html?hpid=topnews

So, when are they going to get around to balancing the budget? I'm not holding my breath.
 

Atreus21

Lifer
Aug 21, 2007
12,007
572
126
So, when are they going to get around to balancing the budget? I'm not holding my breath.

I don't think anyone really cares anymore about the budget, seriously.
 

GTaudiophile

Lifer
Oct 24, 2000
29,776
31
81
This is how much they are going up.


In just 120 days, 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 tax credit 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 top capital gains tax will rise from 15 percent this year to 20 percent in 2011. The top dividends tax rate 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. 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. The major items include:

The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, 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. 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. Until this year, a retired person with an IRA could 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.
 
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Anarchist420

Diamond Member
Feb 13, 2010
8,645
0
76
www.facebook.com
The top marginal rate is already too high. Cutting spending and taxes so the budget would have a $400B surplus to start paying off the debt is a fucking pipe dream.

They need to repeal the corporate tax and reduce the individual income tax by 30% across the board (top marginal rate shouldn't be higher than 24.5% and top bracket shouldn't start before $500k). That would bring in the same amount of revenue.
 

BigDH01

Golden Member
Jul 8, 2005
1,630
82
91
The top marginal rate is already too high. Cutting spending and taxes so the budget would have a $400B surplus to start paying off the debt is a fucking pipe dream.

They need to repeal the corporate tax and reduce the individual income tax by 30% across the board (top marginal rate shouldn't be higher than 24.5% and top bracket shouldn't start before $500k). That would bring in the same amount of revenue.

I see someone doesn't know how the Laffer Curve actually works.
 

Engineer

Elite Member
Oct 9, 1999
39,234
701
126
The top marginal rate is already too high. Cutting spending and taxes so the budget would have a $400B surplus to start paying off the debt is a fucking pipe dream.

They need to repeal the corporate tax and reduce the individual income tax by 30% across the board (top marginal rate shouldn't be higher than 24.5% and top bracket shouldn't start before $500k). That would bring in the same amount of revenue.

Why not cut it to zero % so you would have infinite revenue? :biggrin:

(Art Laffer is rolling over in bed right now! :p )
 

hal2kilo

Lifer
Feb 24, 2009
23,424
10,317
136
hahahahahaha

I'm visiting with my brother in the richest county in the US for the third year in a row(Loudon County, Va) No signs of recession here. Still buldling shopping centers, 2 new high schools opening. Guy next store is a hedge fund algorithm designer with a basement full of computers. I think we could aford to skim a little off the top.

It's actually quite discusting. If people only knew how the other 2 per centers live.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
The top marginal rate is already too high. Cutting spending and taxes so the budget would have a $400B surplus to start paying off the debt is a fucking pipe dream.

They need to repeal the corporate tax and reduce the individual income tax by 30% across the board (top marginal rate shouldn't be higher than 24.5% and top bracket shouldn't start before $500k). That would bring in the same amount of revenue.

Bullshit. There is not one iota of evidence that economic growth is tied to lower taxes. We had massive amounts of growth from the late 40s through the 90s and taxes were far higher than they are now.
 

LegendKiller

Lifer
Mar 5, 2001
18,256
68
86
Each of the major parties has an economic model they trumpet as part of their agenda; for the Dems, they claim to be high taxes/high services, and for the GOP, they claim to be low taxes/low services. Of course these models are frauds in reality, because while both parties, when in power, rush to enact the popular parts of their agendas (low taxes for the GOP, and high services for the Dems), they never seem to get around to doing the unpopular stuff, cutting services or raising taxes. To the Dem's credit, they actually did raise taxes in '92, and promptly lost both chambers of Congress for the first time in ~40 years. Common sense would say then that having learned that painful lesson, what are the odds the Dems ever get around to raising taxes again to actually pay for their agenda? I've long said those odds are very, very slim - just like the GOP, the Dems will just continue to run deficits and kick the whole debt issue further down the road until we become a bigger version of Greece. Today, there's more evidence that's probably correct:

More Dems against tax hikes on the rich
http://www.usatoday.com/money/perfi/taxes/2010-09-02-democrats-tax-increase_N.htm

White House considers tax breaks for businesses
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/02/AR2010090204235.html?hpid=topnews

So, when are they going to get around to balancing the budget? I'm not holding my breath.

Everybody is against tax hikes on the rich because they've been brainwashed that the "good ole times" had lower tax rates than current rates. However, that is a lie spread by the Reaganomic Repuglicans who refuse to acknowledge that we had great growth with far higher taxes.
 

Siddhartha

Lifer
Oct 17, 1999
12,502
1
81
Each of the major parties has an economic model they trumpet as part of their agenda; for the Dems, they claim to be high taxes/high services, and for the GOP, they claim to be low taxes/low services. Of course these models are frauds in reality, because while both parties, when in power, rush to enact the popular parts of their agendas (low taxes for the GOP, and high services for the Dems), they never seem to get around to doing the unpopular stuff, cutting services or raising taxes. To the Dem's credit, they actually did raise taxes in '92, and promptly lost both chambers of Congress for the first time in ~40 years. Common sense would say then that having learned that painful lesson, what are the odds the Dems ever get around to raising taxes again to actually pay for their agenda? I've long said those odds are very, very slim - just like the GOP, the Dems will just continue to run deficits and kick the whole debt issue further down the road until we become a bigger version of Greece. Today, there's more evidence that's probably correct:

More Dems against tax hikes on the rich
http://www.usatoday.com/money/perfi/taxes/2010-09-02-democrats-tax-increase_N.htm

White House considers tax breaks for businesses
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/02/AR2010090204235.html?hpid=topnews

So, when are they going to get around to balancing the budget? I'm not holding my breath.

It would economic suicide to raise taxes during a recession or the early part of a recovery.
 

hal2kilo

Lifer
Feb 24, 2009
23,424
10,317
136
It would economic suicide to raise taxes during a recession or the early part of a recovery.

I actually agree with this only on a TEMPORARY basis, until the economy recovers. Just as stimulus programs are absolutely necessary to keep the economy from going into free fall. But for long term, the tax rate structure as it stands will continue to destroy the middle class.
 

SammyJr

Golden Member
Feb 27, 2008
1,708
0
0
I'm visiting with my brother in the richest county in the US for the third year in a row(Loudon County, Va) No signs of recession here. Still buldling shopping centers, 2 new high schools opening. Guy next store is a hedge fund algorithm designer with a basement full of computers. I think we could aford to skim a little off the top.

It's actually quite discusting. If people only knew how the other 2 per centers live.

I'm outside of Peoria, IL and we still have new homes in the $200k-$350k range going up and selling before completion. People are still buying new cars and TVs and what not. Hard to say what keeps the market up in certain areas.
 

ayabe

Diamond Member
Aug 10, 2005
7,449
0
0
It would economic suicide to raise taxes during a recession or the early part of a recovery.

Yeah except for you guys there is never a time that raising taxes wouldn't be "suicide" so your opinion on this doesn't carry all that much weight, sorry.
 

Mursilis

Diamond Member
Mar 11, 2001
7,756
11
81
It would economic suicide to raise taxes during a recession or the early part of a recovery.

On the one hand, I agree that the effect of significant tax increases would probably not be good for the economy, but on the other hand, I'm reminded of everyone's favorite day to start a new diet - tomorrow. The Dems are no more commited to fiscal discipline than the GOP. In fact, I'd say even less so, since they encourage dependency. Once you've got a gov't jones, it's so very hard to get clean again. Look at the bitter withdrawal symptoms in Greece.
 

hal2kilo

Lifer
Feb 24, 2009
23,424
10,317
136
I'm outside of Peoria, IL and we still have new homes in the $200k-$350k range going up and selling before completion. People are still buying new cars and TVs and what not. Hard to say what keeps the market up in certain areas.

The house I grew up in North Arlington, has been bulldozed, as have about of quarter of the houses in the old neighborhood to build Mcmansions. The old house had to have sold for at least $400k and what they are building on it must be costing between 400K to 500K for a total of 900k.

Of course it's all about location, location, location as it is about 2 miles from the East Falls Church Metro station.

It's so surreal. You'd never know that there was a major recession going on in the country.

These people are either working for the gubment or the new corporate headquarters of all the corporations that have moved into the area to twist the Congress arm.
 
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Darwin333

Lifer
Dec 11, 2006
19,946
2,328
126
Each of the major parties has an economic model they trumpet as part of their agenda; for the Dems, they claim to be high taxes/high services, and for the GOP, they claim to be low taxes/low services. Of course these models are frauds in reality, because while both parties, when in power, rush to enact the popular parts of their agendas (low taxes for the GOP, and high services for the Dems), they never seem to get around to doing the unpopular stuff, cutting services or raising taxes. To the Dem's credit, they actually did raise taxes in '92, and promptly lost both chambers of Congress for the first time in ~40 years. Common sense would say then that having learned that painful lesson, what are the odds the Dems ever get around to raising taxes again to actually pay for their agenda? I've long said those odds are very, very slim - just like the GOP, the Dems will just continue to run deficits and kick the whole debt issue further down the road until we become a bigger version of Greece. Today, there's more evidence that's probably correct:

More Dems against tax hikes on the rich
http://www.usatoday.com/money/perfi/taxes/2010-09-02-democrats-tax-increase_N.htm

White House considers tax breaks for businesses
http://www.washingtonpost.com/wp-dyn/content/article/2010/09/02/AR2010090204235.html?hpid=topnews

So, when are they going to get around to balancing the budget? I'm not holding my breath.

I think they figured out that we probably couldn't live within our means AND provide all the crap they promised even if they raised the hell out of taxes. The people of this country simply don't have the will so they figure we will just keep riding the debt train until it eventually comes off the tracks. I say why the hell not, if they are dumb enough to keep loaning it to us, fuck em. Although I would prefer to see us spend it on a few things that would provide long term benefit after we get cut off, like a new power grid but I guess that doesn't get you very many votes.
 

kranky

Elite Member
Oct 9, 1999
21,014
137
106
If they don't restructure the tax code to move away from driving social issues and address what has to happen to create JOBS, we're just wasting our time.

Globalization is killing our ability to create jobs. Increased business taxes and health care taxes are killing our ability to create jobs. Massive bureaucracy and regulation make it very difficult to start businesses and create jobs.

Stimulus doesn't create jobs. More government programs don't create jobs. Businesses create jobs.

Why do we keep trying to become Greece? That's where we're headed.
 

Jhhnn

IN MEMORIAM
Nov 11, 1999
62,365
14,681
136
On the one hand, I agree that the effect of significant tax increases would probably not be good for the economy, but on the other hand, I'm reminded of everyone's favorite day to start a new diet - tomorrow. The Dems are no more commited to fiscal discipline than the GOP. In fact, I'd say even less so, since they encourage dependency. Once you've got a gov't jones, it's so very hard to get clean again. Look at the bitter withdrawal symptoms in Greece.

Heh. A gov't jones. The financial elite has the biggest jones of all. They're hooked on taxcuts, govt bonds and bailouts. You just need to take a longer perspective to see it. S&L bailout. LTCM. GSE takeover. TARP.

They're not putting any money up front w/o govt guarantees, and they're getting away with it, holding the economy hostage in the process, speaking out of both sides of their mouths simultaneously.

Cut taxes, stimulate the economy and balance the budget all at the same time. And they'll actually be believed by many, again.

Which is pretty much what I figure will happen wrt the Bush taxcuts, that repubs will hold middle and working class cuts hostage to the cuts for the financial elite. Only one of 2 things is likely to happen, because they'll reduce it to an all or nothing proposition, just like they did wrt the patriot act. Either the whole thing gets extended, or it expires. Dems seem to lack the cojones for the latter.

Extortion? Of course. It's what Repubs do best.

The only loser in the deck for the financial elite, the true Bush constituency, is that Estate taxes will likely return to their pre-Bush configuration.
 

hal2kilo

Lifer
Feb 24, 2009
23,424
10,317
136
I think they figured out that we probably couldn't live within our means AND provide all the crap they promised even if they raised the hell out of taxes. The people of this country simply don't have the will so they figure we will just keep riding the debt train until it eventually comes off the tracks. I say why the hell not, if they are dumb enough to keep loaning it to us, fuck em. Although I would prefer to see us spend it on a few things that would provide long term benefit after we get cut off, like a new power grid but I guess that doesn't get you very many votes.

That infrastucture stuff is sooo boring. And it employs too many people without advanced degrees.
 

Darwin333

Lifer
Dec 11, 2006
19,946
2,328
126
I do. Do we really want to be Greece in 10-20 years?

Do you really think we currently have the ability to not end up like Greece eventually? When you do the math and consider the political reality, we be fucked. On a somewhat good note, we can pretend that we aren't that bad off for a lot longer than Greece was able to due to the fact that we control our own money supply. That doesn't mean firing up the printing presses so much as it means we have the ability to play games for a while.

Eventually the math always wins.

Here is a pretty good chart that sorta gets to my point:

http://market-ticker.org/akcs-www?get_gallerynr=13