Friday, April 6, 2012
Taxmageddon: Massive Tax Increase Coming in 2013
The Heritage Foundation, Taxmageddon: Massive Tax Increase Coming in 2013, by Curtis S. Dubay:
If President Obama and Congress fail to act this year, an enormous, unprecedented tax increase will fall on American taxpayers starting on January 1, 2013. ... This impending tax increase is mostly the result of the expiration of many long-standing policies that all expire at the end of 2012. ... Taxmageddon is a $494 billion tax increase that strikes at the beginning of 2013. Under current law, tax policies in seven different categories will expire, and five of the 18 new tax hikes from Obamacare will begin:
Almost 34% of the tax increase from Taxmageddon comes from the expiration of the 2001 and 2003 Bush tax cuts. These cuts are best known for reducing marginal income tax rates, but they also reduced the marriage penalty, increased the Child Tax Credit and the adoption credit, and increased tax breaks for education costs and dependent care costs:
For further details, see here.
It's no coincidence that Presidential elections fall on the opposite side of the calendar from tax filing.
Posted by: PacRim Jim | Apr 6, 2012 2:43:32 PM
Why aren't the marginal rate reductions on the 28 and 31 percent brackets (to 25 and 28 percent, respectively) classified as "pro-growth policies"? One of the premises of the chart seems to be that lowering marginal rates encourages growth, so why doesn't this apply in this context? The same argument applies to the creation of the 10 percent bracket. Am I missing something?
Posted by: Puzzled | Apr 6, 2012 2:07:18 PM
Please correct your erroneous post ASAP. The Bush tax cuts expired December 31, 2010. The Obama/Reid/Pelosi tax cuts (Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ) were enacted in December 2010 to take effect January 1. 2011.
Posted by: AC | Apr 6, 2012 1:19:45 PM
Look for a wave of well-off boomers to retire early before 2013. We can see the writing on the wall.
DW and I (currently earning mid 6-figures) will stop working and paying taxes mid 2012, have enough non-taxable assets to live on for at least 2 presidential terms. Thumbing our noses at the entitlement state, and hope to starve the beast. You think 2007 was a disaster, wait for 3Q 2012!!!
Posted by: alpha ralpha | Apr 6, 2012 12:33:58 PM
Here's an idea: why not wait until the last minute to attempt to pass a bill to stop these massive increases and throw everything into chaos and then pass a bill that no one has read and that has hidden, unknown other taxes in it that are detrimental to taxpayers. That has never been done, right?
Posted by: FastTalker | Apr 6, 2012 12:32:18 PM
Does anyone expect a compromise before the election?
Does anyone expect an era of good feelings after the election, regardless of who wins? Even if the Democrats do not control the White House, they will control the Senate unless there is a change in the filibuster rule.
It's interesting how much economic optimism we have today. Stay tuned: eight months down the road, the picture will have changed.
Posted by: Bob | Apr 6, 2012 7:59:55 AM
It's Obama's jobs program for accountants.
Posted by: Woody | Apr 7, 2012 3:20:49 AM