Archive for the ‘taxes’ Category
From Noisy Room:
Before adjourning for recess, House Democrats passed the largest tax-hike in American history; a rate hike that will soak an average of $3,120 from every family. In an economy reeling from a slowing housing and job market, this is a burden that American families and small business owners simply cannot afford.
Both Barack Obama and Hillary Clinton have vowed to raise taxes on the rich to help pay for their proposed spending proposals. How do they define “the rich?”
Obama and Clinton both promise to reverse Bush’s tax cuts for wealthier taxpayers, but the Democratic budget they’ll be voting for would allow income tax rates to go up on individuals making as little as $31,850 and couples earning $63,700 or more.
h/t to The Right of Wrong, who notes:
That’s a 12% tax increase for those in the that modest bracket. The definitions of wealthy are much more gray than the Democrats realize, or if they do, are simply lying. $50,000 in some places is a great deal of money, in others, it is not. This is the folly of the direct tax and the tax code in general. That’s going to be an extremely difficult hit to swallow.
h/t also to MVass who notes:
The Democratic candidates have marched across America saying they will only tax the rich. They have said that they will only affect big business. They have said that they will make America safer. All are great things. But the facts of their actions indicate they are lying if not confused.
Democrats say one thing, but do another. Here is how they’ve increased taxes on children via the “Kiddie Tax:”
Income-shifting is one of several tax planning tools families have used to lower their tax bill. Historically, parents could save a bundle by transferring highly appreciated investments to their children who are in lower tax brackets. However, this year, Congress has made income-shifting a dream of the past, trapping more kids in the dreaded “kiddie tax.” Beginning January 1, 2008, children under 24 will owe taxes on unearned income at their parents’ higher tax rates.
The “kiddie tax,” or so it has been affectionately named, is a tax on children’s unearned investment income or capital gains. Instead of taxing income and capital gains based on the child’s tax bracket, the kiddie tax requires unearned income to be taxed at the parents’ income and capital gains rates.
The expanded kiddie tax law now makes UGMA and UTMA a poor choice for college savings. Instead, 529 college savings accounts provide tax-free growth on contributions, allowing families to reduce their exposure to income and capital gains taxes. Qualified expenses such as college tuition, books, room and board can be withdrawn tax-free. And unlike UGMA and UTMA accounts, the college savings accounts are owned by the parent.
This also means that the Democrats have changed the rules in the middle of the game. Families that have planned are being penalized. What’s next? Are the Democrats going to come after your Roth IRA or introduce an annual tax on assets?
Why do the liberals think that every issue (even make-believe ones) can be solved with raising taxes? The latest is raising taxes to fight global warming.
Mayor Michael R. Bloomberg plans to announce today his support for a national carbon tax. In what his aides are calling one of the most significant policy addresses of his second and final term, the mayor will argue that directly taxing emissions of carbon dioxide and other greenhouse gases that contribute to climate change will slow global warming, promote economic growth and stimulate technological innovation — even if it results in higher gasoline prices in the short term.
Making you pay more at the pump stimulates economic growth? If that’s true, why not make you pay more at the grocery store, shopping malls, and restaurants? Wait – they’d like to do that…
In terms of revenue, Rangel’s reform would be the biggest tax increase in history. Compared to a baseline where President George W. Bush’s tax cuts are extended and the dreaded alternative minimum tax isn’t allowed to swallow millions of taxpayers whole, the bill raises taxes by a whopping $3.5 trillion over the next 10 years, according to the office of Representative Jim McCrery of Louisiana, the top Republican on the Ways and Means Committee.
To put that in perspective, that’s about $2 trillion more than the 10-year cost of the Bush tax cuts enacted back in 2001.
But the revenue grab isn’t the scariest part. That honor belongs to the increase in marginal tax rates, which is almost unfathomable in its scale. Rangel’s main objective is to repeal the alternative minimum tax, which was originally designed to capture taxes from wealthy individuals but over the years has taken in more and more middle-income families.
To accomplish that, and still collect the AMT revenue, he would enact a surtax on the adjusted gross incomes of wealthy taxpayers. If your family’s income is above $200,000, then your surtax is 4 percent. If it’s above $500,000, it’s 4.6 percent.
But the tax increase on the wealthy doesn’t stop there. When the Bush tax cuts expire in 2010, the top marginal rate goes back to 39.6 percent. In addition, Rangel would restore the phase-out of itemized deductions and personal exemptions that was repealed in Bush’s 2001 bill.
Adding it all up, and adjusting for the tax rate on Medicare, the Rangel bill would raise the federal marginal tax rate on incomes above $500,000 to close to 48 percent.
To put that tax rate in perspective, after adjusting for state and local income taxes, it would be about 13 percentage points higher than the average of U.S. trading partners in the Organization for Economic Cooperation and Development. And it would give the U.S. the fourth-highest combined top marginal tax rate in the OECD, behind only Denmark, Sweden and France.