Well, I procrastinated about doing taxes longer this year than I can ever recall in the past and I am not sure why. And when I say procrastinate – I mean like I am still working on the returns!!
I’ll be honest…in 2008 I heard lots about taxes and how no family making less than $250,000 a year would see any tax increases. And sitting here today seeing my income stay the same as 2007 but my tax liability increase, gives me great pause about whether that statement is true or will be factual as I sit down to complete my 2009 tax return a year from now.
On this Tax Day, I think all taxpaying Americans should be concerned that our leaders are actually poised to enact runaway tax hikes over the next few years and this “tax train” is speeding down the tracks without any ability to slow down or stop.
So, what is all the fuss about? I decided to track down some facts about the tax situation for people like me. Here is what I have discovered so far…
- On April 2, 2009, the US House of Representatives passed H.Con.Res. 85, the Democrat budget resolution, by a vote of 233-196. The budget increases taxes by $574 billion over five years and $1.154 trillion over ten years.
- Days Spent Working to Pay Taxes in 2009: US Avg. 103.
- Americans will pay more in taxes than they will spend on food, clothing and housing combined.
- The Democrat budget recently passed by Congress will double the national debt in 5 years and triple it in 10 years.
- Every American child born this year will owe $70,000.
- The President recently proposed his first budget, which includes the following:
Cap & Tax: The President’s budget proposes a national energy tax that would cap greenhouse gas emissions from regulated entities and require businesses to purchase permits or “allowances” for their emissions-an effective tax on all energy consumption. This proposal is commonly known as “Cap and Tax,” and according to a Massachusetts Institute of Technology (MIT) study, this tax will cost the average American household up to $3,128 per year in increased energy costs.
Health Care Taxes: President’s budget proposes more than $630 billion in new spending on health care reform as a mere “down payment” for additional spending to come.
Small Businesses Taxes: In 2010, the President’s budget will increase taxes on all taxpayers that earn more than $200,000 individually, or $250,000 as a couple. The majority of the burden for this $637 billion tax increase will be borne by small business owners (who pay taxes on this income as part of their individual returns). Small businesses create 60 to 80 percent of all new jobs in America. These new taxes will stifle job creation and economic growth in the midst of a recession.
Capital Gains and Dividends Taxes: Under the President’s budget, taxes on capital gains and dividends would increase for individuals with an income over $250,000 (married) and $200,000 (single) from 15 to 20 percent, increasing taxes on investors by $338 billion over ten years.
Charitable Giving Tax: The budget caps the value of itemized deductions at 28 percent for those with an income over $250,000 (married) and $200,000 (single), which will reduce charitable giving by $9 billion a year.
Death Tax: The President’s budget reinstates the death tax scheduled to be fully repealed in 2010.
Carried Interest Tax: The budget would more than double taxes on carried interest, increasing taxes up from the capital gains rate (15 percent) to the income tax rate (39.6 percent). Carried interest is interest gained on profits from investments and is generally used to pay investment fund managers based on the fund’s performance for investors.
Energy Producer Tax: The President’s budget imposes $31 billion in punitive new taxes on domestic energy production over the next ten years, encouraging U.S. companies to move jobs overseas and increasing our overall dependence on foreign energy supplies.
LIFO Accounting: The President’s budget proposes repealing the first-in, first-out (LIFO) accounting rule which allows businesses to assume the most recent inventory item purchased is the first sold. According the President’s budget, the change would result in a $61 billion tax increase over ten years, borne mainly by manufacturers and small businesses that purchase a great deal of inventory each year.
Wow – just a little research unearthed this non-exhaustive list!
It is time to stop procrastinating, complete and file my 2008 return, and start saving for my 2009 tax bill!