TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Friday, September 24, 2010

Democrats Punt on Taxes

Wall Street Journal, Congress Punts on Taxes: Democrats Put Off Showdown on Bush Cuts Until After November Election:

Democrats abandoned plans to vote before Election Day on extending Bush-era tax cuts for the middle class while eliminating them for better-off Americans, spooked by protests from vulnerable incumbents and bleak prospects for passage.

With time running out to plan for 2011, the delay raises uncertainty for small businesses and individual taxpayers over their future liabilities. It also sets up a titanic battle over taxes after the election.

If returning lawmakers don't pass legislation by Dec. 31, the expiration date of the cuts, tax rates would rise not only on income, but also on estates, capital gains and dividends. Important corporate tax credits and relief from the Alternative Minimum Tax also are up for renewal.

Democratic leaders and President Barack Obama made the proposal to extend the middle-class tax breaks a centerpiece of their midterm campaign strategy. They now face the possibility their members are vulnerable to Republican charges that they have failed to prevent taxes from rising for almost everyone.

Chart

http://taxprof.typepad.com/taxprof_blog/2010/09/democrats-punt.html

News, Tax | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef0133f4902036970b

Listed below are links to weblogs that reference Democrats Punt on Taxes:

Comments

With all the hoopla about the Bush tax cuts expiring, how is it that the media and tax blog writers are not reminding married couples filing jointly for the TAX YEAR 2010 now almost 3/4 over, that they are in for a rude surprise because the Alternative Minimum Tax Exemption amount has reverted to $45,000 from $70,950 in 2009, a difference of $25,950, which when multiplied by the 26% AMT rate, comes to an additional tax of $6,747 -- a possible additional tax if one were to compare 2009 to 2010. Remember everyone must prepare taxes 2 ways -- the regular tax way and the AMT way and pay the higher of the 2 bills. Couples earning less than $150,000 will fare better but still will most likely pay more in taxes because of having to calculate AMT where personal exemptions and standard deductions are not allowed as well as many itemized deductions not being allowed (particularly property and state income tax). The elderly's additional standard deductions of $1100 apiece x 2 for a couple would get eliminated as well as the additional $1000 property tax deduction added on to the standard deduction passed by the Obama administration. All of this is because Congress has failed to pass the AMT Patch for the Tax Year 2010!!

I have written my Congressional representatives and senators asking them to pass an AMT Patch but my inquiries fall on deaf ears. If nothing is done soon, it will be too late!!!!!!

Posted by: V. Fogarty | Sep 25, 2010 12:58:56 AM