Posted on 02/02/2010 6:03:42 AM PST by xtinct
NEW YORK (Reuters.com) --The Obama administration's plan to cut more than $1 trillion from the deficit over the next decade relies heavily on so-called backdoor tax increases that will result in a bigger tax bill for middle-class families.
In the 2010 budget tabled by President Barack Obama on Monday, the White House wants to let billions of dollars in tax breaks expire by the end of the year -- effectively a tax hike by stealth.
While the administration is focusing its proposal on eliminating tax breaks for individuals who earn $250,000 a year or more, middle-class families will face a slew of these backdoor increases.
The targeted tax provisions were enacted under the Bush administration's Economic Growth and Tax Relief Reconciliation Act of 2001. Among other things, the law lowered individual tax rates, slashed taxes on capital gains and dividends, and steadily scaled back the estate tax to zero in 2010.
If the provisions are allowed to expire on December 31, the top-tier personal income tax rate will rise to 39.6 percent from 35 percent. But lower-income families will pay more as well: the 25 percent tax bracket will revert back to 28 percent; the 28 percent bracket will increase to 31 percent; and the 33 percent bracket will increase to 36 percent. The special 10 percent bracket is eliminated.
(Excerpt) Read more at news.yahoo.com ...
Thankfully this is finally seeing the print! I’ve written Michael Steele every week telling him when the tax cuts expire at the end of 2010, all income levels will be paying higher federal income tax rates.
Not one single Republican is brining this this to light. Pathetic!
This is after the election. This will kill the stock market.
Bump for later.
I had thought that Obama was only moving the 33 and 35 percent brackets up??
meanwhile he adds $2 trillion to the deficit each year.
he already said (watch his purple lips move) that only the rates on the top “two” levels of earners will go up
Of course, that’s who pays 95% of the entire federal tax and the second tier tax rate that is going up now hits those below $200K
Now, what taxpayer in their right mind is not psyched to go out and spend us into recovery!
the stock market rose yesterday- the market is being primed and pumped. No one quite knows who is playing the music but a lot of fools are still dancing.
but, but , but, the tax cuts were only for the wealthy.
I know because the dems say so.
duh ... who knew?
According to ozero’s media, the ap, this admin wants to impose $39 BILLION in tax INCREASES on oil, gas and coal companies over the next 10 years. That will result in a huge increase in gasoline, heating oil, jet fuel and diesel. Diesel price increases lead to increases in grocery prices. Add to that the new tax that mugabe wants to lay on the banks. ozero is taxing everyone, not just the 250K earners. If the repubs had a clue, they would start running ads detailing how the koolaid drinkers are going to get hammered by their boy. This wasn’t hard to predict. The dim party created the economic crisis in order to win an election. But they cannot control the bleeding, so while more and more people are losing their jobs, they are not paying taxes. So mugabe has to go somewhere to get the money. They will not cut spending, hell they are increasing spending. This admin is waging a war against everyone in this country including those that got him elected. The unions, illegals, the media, all of them are in this crosshairs just like the rest of us.
This part drives me nuts. You know, my wife and I are simple middle class people. We've done things "the right way." We didn't buy more house than we could afford. We never took out on equity loan (and hence, still have significant equity, even with the housing bust). We didn't spend money frivolously and hence we have some savings.
Back in the fall of 08, when the market tanked, we decided to put some savings in the market, thinking (correctly) that it was a good buying opportunity. We bought a small portfolio of stocks, all of which pay a decent dividend. The dividend is one good reason we stay in the market. It's absolutely galling to think the gubmint will take 40 frickin per cent of OUR dividends.
The bottom line is that it makes a strong case for cashing out of the market before the taxes go up. We're up 40% or so not counting the dividends. We were thinking we'd leave the money in there, even though we expect another significant dip. We figure we'll simply increase our positions on the major dips, avoid transaction costs and just leave the positions there, and continue to collect the dividends.
This policy may force us to cash out. How's that going to help the economy? Meanwhile, ours is smart sensible money being applied through rational self-interest in a way that we profit from, which provides capital to companies that we believe deserve our money.
It's beyond galling. The problem, I guess, is there aren't enough people like us. The idiots who spent all their income and then some, bought too much house, too much car, too much entertainment, etc, are running the show. It's irritating beyond belief. /rant
Then the realization of retroactive taxation reared it's ugly democrat head.....so I guess I'll stay alive and await the tea party candidate of my choice....2012.
They are relying on the taxes and heavy revenues this will inflict on heavy industry before it is even passed. The drop in investments on Wall Street alone will reduce tax revenues because dividend earning stocks will be dropped like a rock. Who wants to pay a 20% tax (probably more after the Democrats raise it) on an investment that is barely earning less than 10% and at risk of going into negative territory any moment?
That's what I read in the local rag today too. Someone's lying.
Obummer has the back of the unemployed in America.... This will help the rats in November.
“The first $2,400 of unemployment benefits are taxable, in 2009 that amount was tax-free.”
$250 thou is not part of their tax figuring...
About a month ago the Democrats put the death tax back for 2010. It's at 45% I believe.
I'm still dancing and I don't think I'm a fool. I bought in right after the crash. Been collecting dividends ever since. Shares are up about 40%. Yea, it's getting near time to make a decision. If I stay in I could lose my gains from the last year, but the dividends are mine to keep. And if it goes down significantly, I'll just increase my positions. They say buy and hold doesn't work these days, but I'm not so sure. I think in the long run, buying on the big dips can work. It's dollar cost averaging that probably doesn't work so well right now. But I can tell you if FCX hits $40 again, I'm buying more.
Sound right?
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