Skip to comments.The 2013 Tax Cliff (Business had better enjoy the next 16 months, then prepare for a large tax bill)
Posted on 09/14/2011 6:18:15 AM PDT by SeekAndFind
President Obama unveiled part two of his American Jobs Act on Monday, and it turns out to be another permanent increase in taxes to pay for more spending and another temporary tax cut. No surprise there. What might surprise Americans, however, is how the President is setting up the U.S. economy for one of the biggest tax increases in history in 2013.
Mr. Obama said last week that he wants $240 billion in new tax incentives for workers and small business, but the catch is that all of these tax breaks would expire at the end of next year. To pay for all this, White House budget director Jack Lew also proposed $467 billion in new taxes that would begin a mere 16 months from now. The tax list includes limiting deductions for those earning more than $200,000 ($250,000 for couples), limiting tax breaks for oil and gas companies, and a tax increase on carried interest earned by private equity firms. These tax increases would not be temporary.
What this means is that millions of small-business owners had better enjoy the next 16 months, because come January 2013 they are going to get hit with a giant tax bill. Let's call the expensive roll:
First comes the new tax hikes that Mr. Obama proposed on Monday. Capping itemized deductions and exemptions for the rich would take $405 billion from the private economy for 10 years starting in 2013. Taxing carried interest would raise $18 billion, and repealing tax incentives for oil and gas production would get $41 billion.
These increases would coincide with the expiration of the tax credits, 100% expensing provisions and payroll tax breaks in Mr. Obama's new jobs program. This would mean a tax hit of $240 billion on small business and workers.
(Excerpt) Read more at online.wsj.com ...
How do they figure President Palin will attack this problem?
Without reading the bill, I suspected that any incentives in this ‘Jobs Bill’ would expire right after the Nov 2012 election.
He is only making noises & trying to bully & fool the public until he has another 4 years to be the Imposter in the Oval Office. MOOOOOCHELLE isn’t done touring the world on the American tax dollars.
RE: How do they figure President Palin will attack this problem?
Any GOP President worth his/her salt will immediately work to cancel and repeal Obamacare — one of the biggest causes of business uncertainties ever.
Then, he/she will work to reform the tax code to make meet three requirements. The 3 Fs of the tax code :
* FIX IT (Make it competitve).
* FLATTEN IT ( Make it simple and understandable ).
* FORGET IT ( Make it permanent ).
All these tinkering around the edges ( 2 years, 3 years, temporary, etc ) will only make it DIFFICULT TO PLAN ahead for businesses and cause more UNCERTAINTY.
No one will think of hiring with uncertainty.
Also, a word about that other term being used TARGETTED. A president should avoid using that word.
That word is code for CRONY CAPITALISM, FAVORITISM, PICKING AND CHOOSING WINNERS, and PORK BARREL SPENDING.
No matter how smart you think you are, you simply CANNOT KNOW which sector of the economy will be competitive to meet demand. LET THE MARKETS DECIDE AND STAY OUT !