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 lowest bracket for the personal income tax is going to increase from 10 percent to 15 percent.
- The next lowest bracket for the personal income tax is going to increase from 25 percent to 28 percent.
- The 35 percent tax bracket is going to increase to 39.6 percent.
- 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.
- The capital gains tax is going to increase from 15 percent to 20 percent.
- The tax on dividends is going to increase from 15 percent to 39.6 percent.
- The "marriage penalty" is also scheduled to be reinstated in 2011.
- Dozens of health care reform taxes
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