And remember -- this is what happens when the Bush tax cuts expire.Twenty-three months after the next president is inaugurated, the Bush tax cuts expire. The winner of the 2008 election and her or his congressional allieswill determine what is done about the fact that, unless action is taken, in 2011 the economy will be walloped.
The five income tax brackets (10, 25, 28, 33 and 35 percent) will be increased by 50%, 12%, 10.7%, 9.1% and 13.1% percent, respectively, to 15, 28, 31, 36 and 39.6 percent. The child tax credit reverts to $500 from $1,000. The estate tax rate, which falls to zero in 2009, will snap back to a 60 percent maximum, and exemptions that have increased will decrease. The capital gains rate will rise, and the marriage penalty will be revived, as will the double taxation of dividends.
Furthermore, the alternative minimum tax was enacted by Democratic moralists in 1969 because 21 millionaires had legally avoided paying any income tax. The AMT, which allows almost no deductions, had one rate (24 percent) until 1993, when Democrats replaced it with two (26 percent and 28 percent). It has never been indexed for inflation and in the current tax year will hit almost one in five households -- 23 million of them.
Interesting, isn't it, that the group seeing the largest tax increase when the "tax cuts for the rich" expire during the next presidential term will be those making the least? And I wonder how many of those low income Americans removed from the tax rolls completely by the Bush "tax cuts for the rich" will find themselves once again required to pay income taxes with the return to Clinton-era tax policies?
Editors note: "tax cuts for the rich" are often calculated like this:
The "rich" family making $200,000 a year (and paying TENS of thousands in taxes) gets a 1% cut saving $2,000. Only gets a ONE PERCENT cut in the rate, but probably a 5% cut in what they are paying.
The "not rich" family making $40,000 a year gets a 3% cut saving $1,200. THREE PERCENT CUT in the rate, but probably a 40% cut in what they are paying.
The class warfare politicians will only tell people about the rich guys $2,000 compared to the other's $1,200 and rail against the unfairness of this. How is this, in any way, unfair to anyone but the rich person who is still subjected to Karl Marx Communist Manifesto style taxation.