Income Tax Sucker Punch Just Around the Corner in 2013

ATRF ^ | 2012-06-26 | Blake Seitz

[92nina]

Current Law & Expiration

The current income tax rate structure was put in place by Title I of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA). EGTRRA is scheduled to sunset on January 1, 2013. The rate structure will then revert to its much higher, pre-2001 levels.

	Taxable Income		2012 Marginal Tax Rate		2013 Marginal Tax Rate
	Up to $8,700 for single filers Up to $17,400 for joint filers		10%		15%
	Between $8,700 and $35,350 for single filers Between $17,500 and $70,700 for joint filers		15%		15%
	Between $35,350 and $85,650 for single filers Between $70,700 and $142,700 for joint filers		25%		28%
	Between $85,650 and $178,650 for single filers Between $142,700 and $217,450 for joint filers		28%		31%
	Between $178,650 and $388,350 for single filers Between $217,450 and $388,350 for joint filers		33%		36%
	Over $388,350 for both single and joint filers		35%		39.5%

Source: House Ways & Means Committee

ATRF Analysis

If Title I is allowed to expire in 2013, marginal income tax rates will increase for all taxpayers by up to one third. The largest increase will occur in the lowest tax bracket, which will adversely affect low-income earners. In fact, 60% of the 2001/2003 tax relief went to middle- and low-income earners.

A key principle of taxation is that if an activity is taxed, individuals will do less of it. Allowing income tax hikes, then, will discourage and cheapen the value of activities that earn income—namely, work and productivity. This would have a significant contractionary effect on the U.S. economy at a time when Americans can least afford it.

The individual income rate hikes would hurt small business as well, because 95% of all U.S. non-farm businesses are structured so that they file taxes through their owner at individual income tax rates. Hiking individual income tax rates, then, will result in fewer jobs and more expensive goods, as small business owners reach deeper into their pockets to pay the tax man.

2013 Cost to Taxpayers

Office of Management and Budget: $120 billion

Read more: http://atr.org/income-tax-sucker-punch-around-corner-a6994#ixzz1yvn2GlyI

[92nina]

This brief by the Americans for Tax Reform Foundation analyzes the harmful effects of expiring income tax relief in 2013.

Take this article and others I found to the fight to the Libs on their own turf; put the Left on the defensive at Digg and at Reddit and in Stumbleupon and Delicious

[piytar]

But but but the Bush tax cuts were for the eevviiillll rich! Only the eevviilllll rich! The LSM told me so daily for several years! This has to be wrong! /spit on the LSM

[pallis]

We should have a Republican in the White House shortly after that, and both houses of Congress under Republican control, so we can see how they will handle it.

[G Larry]

Anybody currently over the 25% marginal rate this year, ought to plan on increasing charitable contributions this year, AND paying down as much Mortgage Principle as possible, to reduce future interest payments.
This year you can still deduct those items.
Next year....maybe not.

[Daveinyork]

The Alternative Minimum Tax goes up THIS year (2012).

[TLI]

We should have a Republican in the White House shortly after that, and both houses of Congress under Republican control, so we can see how they will handle it.

MSM will chant the mantra of "Republican Tax Hike!"

Truth... Facts... nah. That will have nothing to do with it.

.

[tbw2]

Or plan on donating used items, food and talent without expecting to write any of it off your taxes.

[Pagey]

bttt