‘Taxmageddon’ is coming!

[classicman]

Really? This is the first time I've heard this term. I had to read the article.
I wasn't aware of all these changes coming pretty much consecutively.

1) On Dec. 31, the George W. Bush-era tax cuts are scheduled to expire, raising rates on investment income,
estates and gifts, and earnings at all levels.

2) Overnight, the marriage penalty for joint filers will spring back to life,

3) The child credit will drop from $1,000 to $500

4) The rate everyone pays on the first $8,700 of wages will jump from 10 percent to 15 percent.[/quote]

5) The Social Security payroll tax will pop back up to 6.2 percent from 4.2 percent

6) Medicare taxes as part of Othe HCRA will start for high-income households.

Obama and congressional Republicans say they hope to avert the coming blow, which stands to suck roughly $500 billion out of the economy in 2013. But both sides are bracing for another epic showdown in the weeks after the November election, as Democrats prepare to use Taxmageddon to break the partisan impasse over taxes that has blocked action on an array of issues, from modernizing the nation’s infrastructure to taming the national debt.

Since they took control of the House last year, congressional Republicans have needed nothing from Obama. They were the holdouts, demanding big cuts in federal spending in exchange for helping Obama keep the government open and raise the legal limit on government borrowing, known as the debt ceiling.

But in December, deadlock will cut the other way. Republicans need Obama if they want to prevent one of the biggest tax increases in U.S. history — nearly $5 trillion over the next decade, by official estimates — and block deep cuts to the Pentagon that could be triggered as part of last summer’s debt-ceiling accord.

The tax shock is set to occur after the Nov. 6 election but before the new Congress — and potentially a new president — take office two months later. While the outcome of the contest is likely to color the tax debate, Obama will either be freshly reelected or on his way out and, therefore, free to play hardball with Congress.

Lori Montgomery

[ZenGum]

which stands to suck roughly $500 billion out of the economy

They spelled "reduce the deficit by $500,000,000,000" incorrectly.

[SamIam]

Nice save Zen. That article DOES give two different numbers - 500 BILLION vs 500 TRILLION. So just which is it? Meh - who cares? Facts just get in the way anyhow.

Plus, EVERYONE does not pay 10% on their first $8,700 of wages. We don't have a flat tax - yet. Remember tax brackets? Well hysteria to the contrary, they're still in effect, weep as Republicans may.

Also, what's wrong with high income households paying medicare taxes? This will add to a recession? I doubt it. High income households will just have to stop free loading off social security and medicare. Tough shit.

Cuts to the bloated Pentagon? Go tell it to the marines. It's about time that somebody trimmed the fat off all those lucrative defense contracts going to the outfits that made the biggest contributions to the campaign funds of members of the Congressional Defense Committee. Plus, maybe the Pentagon might be encouraged to be more responsible and make every bullet count, so to speak. No more wasting air strikes on killing thousands of civilians and writing it off as "collateral damage." Maybe we could work on killing more enemy COMBATANTS and leaving old people and children alone.

Finally, maybe we could be a little more choosy about who we invade to get control of oil supplies. I suggest we go after Canada. They are our largest supplier of oil and they're right next door so deployment expenses would be greatly reduced. Plus, we out number them. Anschluss time at bargain prices.

Also, if you plow through the article, these increases etc are going to run up those supposedly big bills over a TEN Year Period. Or is it next year? Again, the writer can't decide.

Finally, this new flash came out back in Feburary (check out the date of the article). Since then it seems to have dropped like a lead balloon. This is the first I've ever heard of it.

Come on, Classic. You usually post better stuff than this.

[classicman]

Really? This is the first time I've heard this term. I had to read the article.

The term caught my interest - thought I'd throw it out here for discussion.

[monster]

This sucks but, Federal taxes ae kinda llike throwing change to a beggar. State taxes are the killer here. Is this a Michigan thing?

[Clodfobble]

Definitely varies state-to-state; Texas doesn't even have an income tax.

[BigV]

No income tax in Washington either, unfortunately. Our sales tax rate is quite high, 9.5%.

[Perry Winkle]

Montana state taxes are insane.

[Lamplighter]

Oregon income tax is roughly 10% of your Federal tax.
NO SALES TAX

Oh yes, we do get extract vast sums from visiting Californians
with a tax on motel/hotel rooms.

[SamIam]

Colorado taxes are kept artificially low by TABOR which requires that the voters approve any state tax increases. Naturally, the voters don't. Colorado is going to hell, especially rural Colorado where many state services have all but vanished.

[classicman]

PA is ridiculous - the tax rate isn't that bad, but the don't allow many deductions - I have always ended up owing the bastids - even when getting money back from the Feds.