Unless the U.S. Congress acts, there is going to be a massive wave of tax increases in 2011. In fact, some are already calling 2011 the year of the tax increase. A whole host of tax cuts that Congress established between 2001 and 2003 are set to expire in January unless Congress chooses to renew them. But with Democrats firmly in control of both houses that appears to be extremely unlikely. These tax increases are going to affect every single American (at least those who actually pay taxes). But this will be just the first wave of tax increases. Another huge slate of tax increases passed in the health care reform law is scheduled to go into effect by 2019. So Americans that are already infuriated by our tax system are only going to become more frustrated in the years ahead. The reality is that the U.S. government will soon be digging much deeper into our wallets.
The following are some of the tax increases that are scheduled to go into effect in 2011....
1 - The lowest bracket for the personal income tax is going to increase from 10 percent to 15 percent.
2 - The next lowest bracket for the personal income tax is going to increase from 25 percent to 28 percent.
3 - The 28 percent tax bracket is going to increase to 31 percent.
4 - The 33 percent tax bracket is going to increase to 36 percent.
5 - The 35 percent tax bracket is going to increase to 39.6 percent.
6 - In 2011, the death tax is scheduled to return. So instead of paying zero percent, estates of $1 million or more are going to be taxed at a rate of 55 percent.
7 - The capital gains tax is going to increase from 15 percent to 20 percent.
8 - The tax on dividends is going to increase from 15 percent to 39.6 percent.
9 - The "marriage penalty" is also scheduled to be reinstated in 2011.
It is being estimated that the total cost of these tax increases to U.S. taxpayers will be $2.6 trillion through the year 2020.
Ouch!
But wait, there are even more tax increases coming.
The "health care reform law" contains over a dozen new taxes that will be implemented in stages over the next decade. When you add all of these taxes to the taxes that were mentioned earlier, the result is going to be absolutely devastating. According to an analysis by the Congressional Joint Committee on Taxation the health care reform law will generate $409.2 billion in additional taxes by the year 2019.
Double ouch!
So is it any wonder why the public has such a low opinion of the U.S. Congress?
Every single major poll done on the topic shows that approval ratings for Congress are at record lows.
For example, Gallup's 2010 Confidence in Institutions poll found Congress ranking dead last out of the 16 institutions rated this year.
Of course there are a whole host of reasons why the American people are upset with Congress, but one of the big ones is the fact that we are literally being taxed to death.
However, it is not just federal income taxes that are killing us.
In a previous article entitled "Taxed Enough Already!", we listed just a few of the taxes that Americans have to pay each year....
Accounts Receivable Tax
Building Permit Tax
Capital Gains Tax
CDL license Tax
Cigarette Tax
Corporate Income Tax
Court Fines (indirect taxes)
Dog License Tax
Federal Income Tax
Federal Unemployment Tax (FUTA)
Fishing License Tax
Food License Tax
Fuel permit tax
Gasoline Tax
Gift Tax
Hunting License Tax
Inheritance Tax
Inventory tax IRS Interest Charges (tax on top of tax)
IRS Penalties (tax on top of tax)
Liquor Tax
Local Income Tax
Luxury Taxes
Marriage License Tax
Medicare Tax
Payroll Taxes
Property Tax
Real Estate Tax
Recreational Vehicle Tax
Road Toll Booth Taxes
Road Usage Taxes (Truckers)
Sales Taxes
School Tax
Septic Permit Tax
Service Charge Taxes
Social Security Tax
State Income Tax
State Unemployment Tax (SUTA)
Telephone federal excise tax
Telephone federal universal service fee tax
Telephone federal, state and local surcharge taxes
Telephone minimum usage surcharge tax
Telephone recurring and non-recurring charges tax
Telephone state and local tax
Telephone usage charge tax
Toll Bridge Taxes
Toll Tunnel Taxes
Traffic Fines (indirect taxation)
Trailer registration tax
Utility Taxes
Vehicle License Registration Tax
Vehicle Sales Tax
Watercraft registration Tax
Well Permit Tax
Workers Compensation Tax
Are you dizzy yet?
The reality is that the American people are being drained in dozens and dozens of different ways.
But what did you expect?
Did you think that our politicians would pile up the biggest debt in the history of the world and never ask you to pay for it?
Did you think that we could run deficits equivalent to about 10 percent of GDP without ever seeing tax increases?
The truth is that the U.S. government needs a whole lot more money than even these new tax increases will bring in.
After all, it is being projected that the U.S. government will be spending $2 trillion on the interest on the national debt alone by the year 2020.
To put that in perspective, the entire budget for the U.S. government is less than $4 trillion for 2010.
Are you starting to get the picture?
In the years ahead the IRS is going to be digging deeper and deeper into our pockets and a gigantic chunk of that money is going to go directly into the pockets of those who own our debt.
But very few Americans wanted to listen when this problem was actually somewhat fixable 20 or 30 years ago.
So now we are all going to pay the price - literally.
The estate tax may well end our family-owned business.
Remember, the tax is against the value of all assets, not just liquid assets like cash & stocks.
We have millions in fixed plant & equipment, not liquid cash.
Those capital assets have depreciated to zero, but will be taxed at full market value as part of the estate tax.
So, how many of the 500 people who currently work for us will I have to lay off when it comes time to pay that 55% tax?
NO small business throws off enough cash flow to service that high of a tax!
Gary, any thoughts?
Read what Lee Brobst, a legal historian of 40 years has to say. The proof is in the pudding..
http://www.truthinlaw.net
To: SayWhatEVER: You say: “liberals SHARE wealth”. I agree with you: they share OTHER PEOPLE’S wealth, not their own. Conservatives don’t go out and find wealth laying around and collect it. They EARN it through risk taking, sacrifices, and hard work, at a level beyond most people’s concept.
Liberals are always very generous with other people’s money. Liberals think that there is a moral duty of the rich to give away their hard fought wealth. I’m not talking about inherited wealth like the Kennedy’s or Paris Hilton enjoy. I’m talking about the millionaire next door, the people in America who quietly and meticulously earn their wealth, year after year. That is not hoarding. That is reaping the benefits from one’s own labor.
Liberals too often think that wealth is about luck. They fail to realize that luck is nothing more than being prepared to seize and recognize the opportunities as they present themselves.
Bill-your obviously rich-I guess its time you will need to spread the wealth. Maybe you can take your company public to raise money to pay your tax bill? Sell it to a rich friend?
I would love to have this problem-having so much money that I would even have a tax bill, much less one so big. I will tell you what-lets trade places. I would love to have your problem. I would not even complain about the tax bill because I would still be rich when I was done paying it. Do you know what its like having to go to the food pantry to be able to feed your family because the only jobs out there (yes I work) are crap low paying ones. Please -send me your money I will gladly pay the tax bill. I wont even complain about it. I am absolutely serious about this. I love it when the rich complain-you go stand in line at the food pantry. I will go to the fancy restaurants.
Bill – you need to meet with a financial advisor, one who specializes in estate planning. With the proper planning, you will not lose 55% of your estate, in fact your estate probably won’t have to pay any tax.
or you can just own a church and not have to pay taxes at all..making money off of “god”..
must be nice.
The estate tax will indeed revert to 55% – whether the exemption will be raised from $1 million is to be seen.
Again, the tax is against the value of all assets – not just liquid ones, but land, equipment, and whatever the business is valued at (usually calculated from previous year cash flows)
There’s no planning to be done apart from the fact that to generate the cash flow we’ll need to service the loan (assuming we can borrow enough) I’ll have to cut costs significantly.
The bank will not loan us the money to pay the tax (due a scant 6 months after death) unless I can show them enough cash flow to service the loan.
Like most all businesses, labor is our highest variable cost.
So, the only question is how many layoffs will it take to pay tax on 55% (minus any exemption) of our land plus equipment plus the value of the business itself?
As reported by Politifact.com and in many newspapers today, 22 million jobs were created during the two terms of the Clinton administration. 1.1 jobs were created during the two terms of the Bush administration. More jobs have already been created under the Obama administration than was created in 8 years under Bush.
Wages grew by 21 percent under Clinton and only 2 percent under Bush. So much for the trickle down economic policies the Republicans so strongly believe in. Giving tax cuts that benefit the rich the most does not create jobs. It only gets us further in debt and was a major reason for our economy collapsed under the Bush administration.
Local income tax? Can someone please explain that one? I’ve never heard of anything like that and if the town I’m living in now has such a thing, I’m way behind in paying.
Bill-you never commented on my offer to trade places with you-you asked me for a comment and I gave you one. Quit complaining-many folks wish they had your problems.
Do you want any cheese with all that wine (ing)?
Bill come on-I was serious about us changing problems. I was just thinking of all the debts I will pay off and how my family can finally afford to eat without going to the food pantry. I will even donate to the church. Let me take your inheritance tax worries away.
I would love to have an in ground pool that has a retractable roof so we could use it year round. I would love to travel and see other countries.
If all your money worries are stressing you out I can promise they will not stress me out.
So, Gary, you would fire around 500 people, most of whom have worked for you for more than a decade, to do the things you mention?
The reason why taxes are high is because our wages are lower than ever – in real dollars, we haven’t gained wages in relation to the growth in productivity. All that money went to the rich and super-rich who own the system.
Despite this decline in the middle class, the people expect services to be the same or better than they have been in the past. So, demand for services exceeds the budget, and we run defecits.
To pay for these services, we need to pay higher taxes – or figure out how to raise our own wages, so that the tax bite that government takes seems smaller.
After all, if you got a $5,000 raise, and $3,000 was taken out in taxes, you’re still $2,000 ahead – and $3,000 or some large fraction of that should come back to you in services.
But if you take a $5,000 hit in salary… you’re going to be paying less in taxes. You might even drop down a tax bracket, paying even less than before. Your taxes “got lowered” by your dropping wages. Big LULZ. You are even depriving the “gubbmint” of the opportunity to tax and spend. So we have less, and worse services as a result.
Well, that’s what we’ve experienced for 30 years. Lower wages, lower taxes. And also tax cuts that have helped rich people get richer.
Bill-I would get a good tax lawyer. You will not have to close your business to pay estate tax. If I were in your shoes I would be so happy to be rich like you are that I would try to sell the business-maybe even to the employees, pay the tax and still be rich. I assure you I would not be complaining about this on a web site. There are so many people who would LOVE to have your problems. I gave you a solution and it still stands-lets trade places. Put up or shut up.
gary; your problem is not unusual. you got da gimmeez. gimmee your money, and your business. in reality you should ask for the work ethic of this man. i own a small business in a small town. i could give the business to most people in this town; in sixty days they would be broke.
you should be drowning in shame, keep asking for a gimmee – you will get what you have. tough! allen
Bill- I had a response but the “moderator” did not post it.
You do not need to lay folks off. Simply sell your business to the employees or get a good tax lawyer. I continue to offer to trade places with you. I am the working poor and would LOVE to have your problems. I was in line at the food pantry and thought of you complaining because you had to pay a estate tax. I can bet that EVERY person at the pantry would gladly trade places with you and gladly pay any tax and still be rich.
Your wealth could really improve the quality of folks life.
Moderator-QUIT MODERATING. you are way too slow to post and edit too much out. Let people say what they want to say. I do not think there is anything anyone could possibly say that would offend me or anyone else and if it does offend, people need to grow up.
Gary – I agree with Allen. Also Bill has every right to complain, he is not only responsible for 500 employees but has worked probably is whole life to get where he is today. Bill has worked and earned what he has received. It seems to me you are the one that is complaining. Instead of concentrating on writing responses on a blog, why don’t you go out and search for a job. Moreover, if you are so desolate and need to go to a food pantry how do you have computer and access to the internet?
Gary -
My Grandpa came to this country with nothing but the shirt on his back. My Dad worked multiple jobs to put himself thru night school. I am fortunate to have been able to stand on their shoulders, get a good education, and work my behind off in order to afford many of the things I want in life.
Society (and the rich) are obliged to help the poor become self-sufficient.
They are not obliged to help the lazy. Nor the people who just ‘want’ what other folks have. Nor the people who chronically make bad decisions.
If you are as poor as you say – I hope you are just unlucky, and:
1. You paid excellent attention in school and got great grades (because it doesn’t show in your posts).
2. You don’t have any kids. Because it would be very irresponsible of you to bring children into the world when you can’t support yourself.
3. You are using your computer and time to take online classes to better your resume so that you can find a better job.
If not – it sure isn’t anyone else’s problem but your own – and it sucks for everyone who is pulling your weight for you.
We’ve all had enough taxes for the time being.
I have to side with Bill as above, he has a desire to keep his business and his employees.
Most people who are poor and want money, generally speaking, simply don’t have the desire to better themselves. It’s the same old excuses, there are only “low paying” jobs where I live. That’s may be true, so how about creating your own job on your off time?
How about moving to where they do pay? How about developing a burning desire to succeed? How about simply starting a blog website that could be monetized by ads? Make arts and crafts and sell at flea markets? Sell stuff on eBay or craigslist? Many people have started successful business’ with only the shirt on their back to become quite successful.
When a person has a burning desire to better themselves, nothing can stop them- except taxes which prohibit business growth. If you get taxed beyond belief, there is little room for growth. Growth means jobs for other people. The business cannot grow so it dies. It is taxed out of existence. Choked out life.
Guess that’s the difference between employees and business owners. One has the desire to succeed and create and multiply (helping others in the process) and one can never get enough and only wants more, consumes all he/she gets and as a result, can only help themselves.
If someone has time to complain here about people who own business, they are wasting time on developing something for themselves which in the end will benefit them and others.