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Obama Unmasked, Part III: Taxation

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Bloviating Zeppelin: Obama Unmasked, Part III: Taxation

Bloviating Zeppelin

(in-ep-toc'-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

Friday, July 02, 2010

Obama Unmasked, Part III: Taxation

You'd best get prepared, America -- that is to say, if you still have a job in six months.

From Americans for Tax Reform:

In just six months, the largest tax hikes in the history of America will take effect. They will hit families and small businesses in three great waves on January 1, 2011:

First Wave: Expiration of 2001 and 2003 Tax Relief

In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011:

Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. The full list of marginal rate hikes is below:

- The 10% bracket rises to an expanded 15%
- The 25% bracket rises to 28%
- The 28% bracket rises to 31%
- The 33% bracket rises to 36%
- The 35% bracket rises to 39.6%

But wait, as they say: there's more:

Higher taxes on marriage and family. The “marriage penalty” (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per child. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut.

The return of the Death Tax. This year, there is no death tax. For those dying on or after January 1 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones.

Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.

Second Wave: Obamacare

There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:

The “Medicine Cabinet Tax” Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).

The “Special Needs Kids Tax” This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (Currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. Under tax rules, FSA dollars can be used to pay for this type of special needs education.

The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.

Third Wave: The Alternative Minimum Tax and Employer Tax Hikes

When Americans prepare to file their tax returns in January of 2011, they’ll be in for a nasty surprise—the AMT won’t be held harmless, and many tax relief provisions will have expired. The major items include:

The AMT will ensnare over 28 million families, up from 4 million last year. According to the left-leaning Tax Policy Center, Congress’ failure to index the AMT will lead to an explosion of AMT taxpaying families—rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.

Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”

Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the “research and experimentation tax credit,” but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.

Tax Benefits for Education and Teaching Reduced. The deduction for tuition and fees will not be available. Tax credits for education will be limited. Teachers will no longer be able to deduct classroom expenses. Coverdell Education Savings Accounts will be cut. Employer-provided educational assistance is curtailed. The student loan interest deduction will be disallowed for hundreds of thousands of families.

Charitable Contributions from IRAs no longer allowed. Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA. This contribution also counts toward an annual “required minimum distribution.” This ability will no longer be there.

“If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.” -- Joseph Goebbels, Hitler's Propaganda Minister

Mr Obama has been proven, again and again, to be Mr President Liar -- recall, if you will, his quote reproduced above. And feel free to use that card, Mr & Mrs American Obama Voter, to exempt yourself from the coming massive tax hikes.

To those who voted for Barack Obama -- how is Das HopenChange about to work out for you in reality, eh?



Blogger Toaster 802 said...

It is working out fine for the bulk of Obots...since they pay no taxes, and will demand more money to cover any tax they pay as a cost of living raise.

The other class of Obots, the collage indoctrinated may end up not liking it, but the guilt will keep them "happy to spread their wealth around".

As for us, the homeland gestapo will soon be able to deal with us as they please...

Thu Jul 01, 07:02:00 PM PDT  
Blogger Bushwack said...

To all those that voted for the Triad of Communism: F*** YOU.

Thu Jul 01, 07:14:00 PM PDT  
Blogger Bloviating Zeppelin said...

Toaster 802, in fact you make a great point, as it is a truism that 50% of voters pay 97% of the taxes, and another 50% of voters pay only 3% of the taxes.

So, of course, a full HALF of this country will vote themselves as much largesse as possible because -- of course -- the have "NO SKIN IN THE GAME."

Robert: in two words, I guess that sums things up.

Welcome to your New Taxes, America.


Thu Jul 01, 07:34:00 PM PDT  
Blogger Well Seasoned Fool said...

Won't hurt a broke old fart like me but it will hammer my children.
Of course, they will find a way to further get our wee mite from Social Security - one way or another.

Thu Jul 01, 07:59:00 PM PDT  
Blogger Z said...

BZ, there just better darned well be a way OUT of this MESS this guy's created.
At least the idiots who voted for THE ONE are also getting taxed out of their wits...and they ARE waking me, they are.

Thu Jul 01, 10:36:00 PM PDT  
Blogger Bloviating Zeppelin said...

Z: Ducky "waking up"? Man, I find that hard to believe. . .


Fri Jul 02, 05:02:00 AM PDT  
Blogger CJ said...

I posted a link to your piece on my facebook page. It's too important not to share. Great work, BZ.

As for me? How's this for crazy - the value of my home has gone down... and my property taxes have gone up.

The State of Michigan is going to take 3% more of my pay to help pay for an early retirement incentive program for Michigan school personnel...



Fri Jul 02, 08:33:00 AM PDT  
Blogger A Jacksonian said...

For this Administration it will be anyone WORKING is RICH... the goal is to remove the rich, of course.

And the Left will just love that after all the venom spewed towards the nasty, evil, rotten insurance companies about those with pre-existing conditions... that the federal government will have the exact, same problem and may have to turn away those with pre-existing conditions...

With lots of tax dollars spent, of course, not to cover them.

Perhaps some cluebats can be distributed to the Left about how this sort of thing just DOESN'T WORK.

Fri Jul 02, 10:46:00 AM PDT  
Blogger Bloviating Zeppelin said...

cj: in Fornicalia we still have Proposition 13 in affect, in which Howard Jarvis & Paul Gann were able to get an amendment passed which essentially limited property taxes. However, most every other tax went up in response. My house has lost significant value but my assessment has not gone up.

If Fornicalia legislators have their way, I sense a push for repeal of Prop 13 in the air.

AJ: because the bottom line is, WHO PAYS? SOMEONE must ALWAYS pay.


Fri Jul 02, 01:35:00 PM PDT  

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