Friday, April 16, 2010

The Bush Tax Cuts

Have you been hearing that the "Bush tax cuts" are set to expire this year? It sounds ominous, sure, but do you know how it will affect you? More than you think, probably, and for many younger people who never earned money under the old rates, it will be a shock. All brackets are set to increase at least 3%, but it's worse than that sounds. If you are currently taxed at the 25% rate, your rate will increase to 28%. That's actually a 12% increase (3/25=12). If you're taxed at the 28% rate, your rate will increase to 31% (or a 9.7% increase). Lots of other things will get worse, too -- the deduction for married couples (it's the return of the "marriage penalty"), the child tax credit, the capital gains rate, and so on.

Here is a simple article that explains everything very well from The Tax Foundation.

More later...

1 comment:

  1. I know that tax code very well and even the adjusted provisions in Obama's budget raise taxes significantly, the highest percentage increase to those that can least afford it. The 50% increase from 10% to 15% for low income earners is a direct contradiction of The One's promise not to raise taxes on those earning less than $250,000.

    The estate tax exemption made permanent at $3,500,000 is a step in the right direction as long as it is indexed to inflation. It will still mean that many farms will have to be sold when mom and dad die, just to pay the 55% tax on everything over $3.5m. Businesses will close their doors when mom & pop die because... yup, the kids have to sell off the assets to pay the taxes.

    Top earners are top job providers. Take from the top job providers and you take jobs. Take jobs and the financial problems continue and people remain dependant on Uncle Sugar. Almost seems like they are planning it that way. Uh huh.