about the universe forum commander Shop Now Commanders Circle
Product List FAQs home Links Contact Us

Thursday, July 22, 2010

HIGHER TAXES IN 2011

Steve Cole writes:

If Congress does nothing (good or bad) all of us Americans will see tax increases next year. Well, shucks, somebody has to pay for this mess, but the higher taxes will impact economic recovery.

The 2001+2003 tax cuts will expire, causing income tax rates to increase, giving all of us an income tax bill that is 10% or more higher. The marriage penalty returns, and the child tax credit will be cut in half. Also, inheritance taxes (currently zero) go back to 55% (on estates over a million) next year (within reach of two homes and an IRA). Capital gains tax will also jump back to old levels, and it was this cut that propelled the stock market to the previous high. Taxes on dividends will more than double.

The health care thing is loaded with new taxes. Health savings accounts and other ways to pay medical costs with pre-tax dollars go away. Flexible spending accounts will be capped at $2500 for the first time, and that hits parents of special needs kids very hard.

Small business will be hit by new rules preventing equipment purchases from being expensed, requiring them to be depreciated over many years. Alternative minimum taxes will get worse, hitting 48 million families instead of just four million. Lots of new business taxes will suddenly appear, and a lot of old deductions and credits will go away. Teachers can no longer deduct expenses for classroom supplies. Tuition deductions go away. Charitable deductions from IRAs will be disallowed.

Oh, and the cost of the medical insurance that your employer gives you for free is now taxable income. Good luck!