When it’s a single thief, it’s robbery, when it’s a thousand thieves, it’s taxation. ~ Vanya Cohen
Janet Novack, finance columnist for Forbes, gives a good summary of the taxes that are coming. Despite what people are telling you, they are real and they are coming – that’s without the rich paying their fair share. Higher taxes coming
Deserving special mention are the upcoming Obamacare bills which have already set in by forcing insurance companies to pay for all kinds of goodies such as birth control. The chart above shows how Obamacare will be paid for – it’s mostly taxes and mostly from the “rich.” The “rich” will include the middle class.
Upcoming taxes listed in Ms. Novack’s article –
- The 2% temporary tax cut in Social Security deductions ends January 1st.
- Dozens of tax cuts expire in December, including the vacation from the alternative minimum tax for over 20 million families.
- Coming on Jan. 1, 2013: “Medicare surtaxes” on income above $250,000 per couple that were adopted to help fund Obama’s 2010 health coverage expansion. One is a 3.8% extra levy on investment income (including capital gains, interest and dividends) and the other a 0.9% surtax on salaries above $250,000 per couple.
- The big 2001 and 2003 Bush tax cuts won a two-year extension in the Obama-Republican deal of December 2010 and are now set to expire at the end of 2012. Also expiring: a two year cut in the estate tax as well as tax cuts that were originally part of the 2009 stimulus, including Obama’s prized $2,500 American Opportunity college tax credit. If these tax provisions expire, the top tax rate on ordinary income such as salary will go from 35% to 39.6% (or 40.5%, when the Medicare surtax is included) and the top rate on long term capital gains will go from 15% to 20% (or 23.8%, when the surtax is included). Meanwhile, the current $5 million exemption from estate and gift tax would drop to $1 million, and the 35% tax rate would rise to 55%. Middle class taxpayers, too, would see tax hikes and the earned income tax credit for the working poor would shrink. (To see how the loss of the tax cuts would affect you, try out the Tax Policy Center calculator here.)