Guest Author - Linda Sue Grimes
If the Bush tax cuts are allowed to expire at the end of 2010, taxpayers will experience the largest tax increase in history. Every income bracket will experience an increase, averaging an $1800 additional expenditure which will amount to a 200 percent increase for many families. The following list shows the increase number for Americans from married couples to small business owners:
• 48 million married couples will face a $3,007 increase on average. Part of the increase is due to the fact that many married couples will once again be forced to pay more taxes as a married couple than if each were treated as a single.
• 12 million single women with dependents will face a tax increase averaging $1,091.
• 18 million seniors will face a $2,181 average tax increase.
• 27 million small business owners will face a $4,066 tax increase on average.
The following list explains the devastation that expiration will have on families, especially lower-income families:
• A single parent with two children earning $30,000 would see an increase of over $1,600 in taxes.
• A family of four earning $40,000 would see an increase of over $2,300 in taxes.
• A family of four earning $50,000 would see an increase of over $2,100 in taxes – an increase 191 percent.
• A family of four earning $60,000 would see a tax increase of approximately $1,901 in taxes – an increase of 70 percent.
• A family of four earning $80,000 would see a tax increase of about $2,000 in taxes.
Death Tax, Dividends, Capital Gains
In addition to these tax increases, there will be other increases: “If Congress does not act to make the tax relief permanent, the death tax will come back in full force. In addition, the tax rate on dividends will return to a maximum of 39.6 percent and the top tax rate on long-term capital gains will climb from 15 percent to 20 percent.”
Harm to Economy
According to the official White House Web site: “Nearly 75 percent of the taxpayers who benefit from the reduction in the top rate are small business owners. The looming tax increases are affecting today's economy by creating uncertainty, which causes small businesses to think twice about expanding or hiring new workers. These tax increases will harm economic growth by taking more money from small business owners and sending it to politicians in Washington.”
If the tax cuts expire, low-income workers will pay more, while the highest earners would pay less: “Six million American households will be added to the income tax rolls, and low-income families with one or two children wouldn't be eligible for the refundable child tax credit.”
Higher Earners Pay More Under the Bush Tax Cuts
Despite the opposition’s disingenuous naming calling, the Bush tax cuts actually reallocated the tax burden to the higher-income earners: “The President's tax relief has shifted a larger share of the individual income tax burden to higher income Americans. As a result, Americans with the highest incomes – the top five percent – pay a greater share of the total Federal income tax burden than they would absent the tax relief. They currently pay approximately 60 percent of all Federal income taxes this year, but would only have to pay approximately 57 percent if the tax relief expires.”
For more information:
President Bush’s Tax Relief