Tax increases in 2011 and 2012

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Re: Tax increases in 2011 and 2012

Postby Arthur Rubin » Sat Sep 04, 2010 5:08 am

Mostly correct. It's likely that Congress will patch the AMT issue, as they have the last 5 years, although it no longer seems likely that they'll resolve the 2010 AMT by 1/1/11, but the patch is likely to be retroactive.
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Re: Tax increases in 2011 and 2012

Postby Judge Roy Bean » Sat Sep 04, 2010 5:23 pm

There's a growing disturbance among small business owners out here; some of them are just starting to talk to their accountants and tax preparers.

Remember that the taxes, expenses and fees employers pay are voluntary in one way - if you don't have someone employed, you don't pay as much. Being the nice guy and keeping more people on the payroll than you really need is going to be harder and harder to justify.

Get ready for 12% unemployment next year unless we reshape the House and Senate.
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Re: Tax increases in 2011 and 2012

Postby Famspear » Sat Sep 04, 2010 7:22 pm

It appears that the article by Ryan Ellis on September 3, 2010, is simply talking about the expiration of the lower tax rates that started with the tax year 2001. In other words, in 2011 we revert to something like the individual federal income tax rate structure we had for tax years 1993 through 2000 (i.e., when the highest rate was 39.6%).

Without doing a detailed research on this, I believe section 901 of the Economic Growth and Tax Relief Reconciliation Act of 2001, Pub. L. No. 107-16, was a "sunset provision." This means that the tax breaks for years 2001 through 2010 expire -- beginning for "tax years beginning after December 31, 2010."

Ellis goes off the deep end a bit -- for example, when he talks about the Economic Substance Doctrine. He falsely states that IRS is now empowered to disallow "perfectly-legal tax deductions and maneuvers......"

EDIT: I'm not clear on how he determined that this would be the "largest tax hike in history".

At any rate, to focus just on the individual income tax, I would like to note that a marginal tax rate of 39.6% on the highest level of income is paltry compared to tax rates in the olden days. For example, the highest marginal tax rate was 92% in the early 1950s. Even I can remember when the highest marginal rate on dividend and interest income was something like 70%.
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Re: Tax increases in 2011 and 2012

Postby Arthur Rubin » Sat Sep 04, 2010 8:10 pm

Famspear wrote:It appears that the article by Ryan Ellis on September 3, 2010, is simply talking about the expiration of the lower tax rates that started with the tax year 2001. In other words, in 2011 we revert to something like the individual federal income tax rate structure we had for tax years 1993 through 2000 (i.e., when the highest rate was 39.6%).


You're absolutely right, in terms of the Ryan Ellis article. The text includes also the expiration of the (annual) AMT adjustment provision, and a few provisions of health (insurance) reform.

The AMT adjustment was put in place as a "one-time" patch for at least each of the past 5 years. In fact, I don't know if it's in place for 2010.

Health (insurance) reform increased a number of taxes on individuals, also, but the effective dates range from 2011 through 2017. I particularly "like" the increase of the 7.5% floor for medical expenses to 10% (not mentioned in the article, as most individuals don't deduct medical expenses, anyway), and the 3.8% "Medicare surtax" on unearned income. This latter tax, essentially, increases the Medicare base to include unearned income as if it were self-employment income, but not counting it toward Medicare eligibility for those who do not have adequate earned income.
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Re: Tax increases in 2011 and 2012

Postby Harvester » Sun Sep 05, 2010 1:49 am

Not for me! :mrgreen:
And anyone else who knows the true nature of income.

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Re: Tax increases in 2011 and 2012

Postby Investor » Thu Sep 16, 2010 1:18 pm

Judge Roy Bean wrote:There's a growing disturbance among small business owners out here; some of them are just starting to talk to their accountants and tax preparers.

Remember that the taxes, expenses and fees employers pay are voluntary in one way - if you don't have someone employed, you don't pay as much. Being the nice guy and keeping more people on the payroll than you really need is going to be harder and harder to justify.

Get ready for 12% unemployment next year unless we reshape the House and Senate.


Agreed.

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Re: Tax increases in 2011 and 2012

Postby Burzmali » Thu Sep 16, 2010 6:01 pm

Vote republican or the sky will fall?

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Re: Tax increases in 2011 and 2012

Postby Brandybuck » Thu Sep 16, 2010 6:13 pm

Burzmali wrote:Vote republican or the sky will fall?

Show me a Democrat who wants to cut taxes and rein in spending, and I might just send him or her a campaign contribution. The policies of ever increasing debt and higher tax burdens, whether by Democrats or Republicans, needs to stop. It's not about party, it's about fiscal sanity.

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Re: Tax increases in 2011 and 2012

Postby Burzmali » Thu Sep 16, 2010 6:43 pm

Brandybuck wrote:
Burzmali wrote:Vote republican or the sky will fall?

Show me a Democrat who wants to cut taxes and rein in spending, and I might just send him or her a campaign contribution. The policies of ever increasing debt and higher tax burdens, whether by Democrats or Republicans, needs to stop. It's not about party, it's about fiscal sanity.

Hey, if you want vote for austerity programs during a recession, more power to you. It's never really worked all that well in the past, but hey, their is a first time for everything. No, my complaint is for those that spout doom and gloom about issues that are >90% likely to be fixed. It smacks of Palin's "Vote for us or the terrorists win" rhetoric.

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Re: Tax increases in 2011 and 2012

Postby Lorax » Thu Sep 16, 2010 7:56 pm

If congressional Republicans want a fight to the death over whether to raise the taxes of the richest American's back to Clinton era rates, I say go for it. As for austerity working during a recession, I seem to recall that it worked well for the Harding administration in the early 1920s, but that certainly doesn't mean it will work now. These policies usually end up benefiting those least in need and leaving the rest behind.

All the fuss over deficit spending strikes me as rather odd, because the whole debate is small potatoes compared to the structural, long-term problems in our economy- namely the fact that manufacturing continues to decline as those jobs go to countries with extremely low wages, few protections for workers and vastly inferior environmental standards. Meanwhile the domestic economy has been propped up by consumer spending, and shifts in attitudes and mounting private debt means we likely can't rely on consumer spending to be nearly as high as it has been. These are the real problems people from all over the political spectrum should be most concerned about when it comes to the economy. If you think lower taxes for corporations and the super rich combined with cuts to programs that provide some security to the most vulnerable people in the country are going to bring back the high-wage manufacturing jobs we've lost over several decades, please send me a bit of whatever you're smoking.

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Re: Tax increases in 2011 and 2012

Postby Cpt Banjo » Thu Sep 16, 2010 8:49 pm

Regarding the estate tax, it's hard to believe that Congress (no matter who controls it) will allow the exemption to remain at $1 million in 2011. Both parties will likely agree to raise the exemption to at least $3.5 million, but the big fight will be over the tax rate.

Of course, I thought it was inconceivable that Congress would ever let the estate tax go into suspension in 2010, but the idiots in Washington have surpassed themselves in irresponsibility.
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Re: Tax increases in 2011 and 2012

Postby Nikki » Thu Sep 16, 2010 11:29 pm

The only way the 2001 tax cuts passed into law was the sunset provision.

Had they not been scheduled to expire, the financial analysis of their impact would have blown tehm out of the water.

However, since the President was preaching vood<<<< trickle-down economics and working on the assumption that the cuts would boost the economy substantially, he was able to generate a smokescreen big enough to totally befuddle the congress.

Low tax rates are wonderful and tax cuts generate re-election. However, any administration that cuts taxes without corresponding spending cuts and fails to addres the trillion pound gorilla in the living room (the national debt and the interest thereon) deserves a one-and-gone.

Interest payments on the national debt (which doesn't count those pesky little IOUs to the Social Security Trust Fund) are enough to saddle multiple generations with less return for their tax dollars.

I would happily support any candidate who favors INCREASING taxes -- across the board -- and capping spending to reduce the deficit.

Unfortunately, no elected official is going to let his pet military contract or bridge or museum get killed and threaten his re-election.

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Re: Tax increases in 2011 and 2012

Postby Judge Roy Bean » Fri Sep 17, 2010 3:46 am

Brandybuck wrote:
Burzmali wrote:Vote republican or the sky will fall?

Show me a Democrat who wants to cut taxes and rein in spending, and I might just send him or her a campaign contribution. The policies of ever increasing debt and higher tax burdens, whether by Democrats or Republicans, needs to stop. It's not about party, it's about fiscal sanity.


Agreed. The leadership of the Republocrat and Demipublican parties need to face the real potential of their ignominious demise.

The noisy tails have been wagging the ignorant dogs for decades.
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Re: Tax increases in 2011 and 2012

Postby Joey Smith » Sun Sep 19, 2010 6:39 am

Many of the tax cuts should never have been passed in the first place, and can be argued to only have had three effects:

(1) Significantly increased the national debt;

(2) Helped to incentive the "flip property" mentality of the real estate markets, leading to false economic gains and the instant bubble bursting; and

(3) Helped to increase the wealth gap disparity between rich and poor.

As others have stated, unless the cuts had sunset provisions they would never have been passed in the first place because the long term markup would have been extremely bad.
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Re: Tax increases in 2011 and 2012

Postby Burzmali » Mon Sep 20, 2010 3:15 pm

Joey Smith wrote:Many of the tax cuts should never have been passed in the first place, and can be argued to only have had three effects:

(1) Significantly increased the national debt;

(2) Helped to incentive the "flip property" mentality of the real estate markets, leading to false economic gains and the instant bubble bursting; and

(3) Helped to increase the wealth gap disparity between rich and poor.

As others have stated, unless the cuts had sunset provisions they would never have been passed in the first place because the long term markup would have been extremely bad.

Wait, (3) wasn't the original purpose of the cuts?

Whenever the republicans are in power the gap between the rich and everyone else widens, hell that was Reagan's platform. Why would anyone expect that tax cut to be any different?

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Re: Tax increases in 2011 and 2012

Postby Number Six » Mon Sep 20, 2010 5:01 pm

The Bush tax cuts were brazenly political and need to be allowed to expire. Check out this article from yesterday's Times:

http://www.nytimes.com/interactive/2010 ... 019&st=cse
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Re: Tax increases in 2011 and 2012

Postby Burzmali » Mon Sep 20, 2010 6:00 pm

CaptainKickback wrote:Then again, those 71% of the people making less than $50,000 pay 3% of the taxes, so it is only fitting that the bulk of the tax breaks are enjoyed by the 39% that pay 97% of the taxes.

http://www.american.com/archive/2007/no ... -the-taxes

The latest data shows that a big portion of the federal income tax burden is shoul&shy;dered by a small group of the very richest Americans. The wealthiest 1 percent of the population earn 19 per&shy;cent of the income but pay 37 percent of the income tax. The top 10 percent pay 68 percent of the tab. Meanwhile, the bottom 50 percent—those below the median income level—now earn 13 percent of the income but pay just 3 percent of the taxes. These are proportions of the income tax alone and don’t include payroll taxes for Social Security and Medicare.


But hey, why let facts stand in the way of class warfare and screwing the economy......I mean taxing and over-spending are doing so well. :roll: :lol:

Did you just cite a three year old article from the American Enterprise Institute's mouthpiece, written by one of the Heritage Foundation's homeboys to refute a piece by the Tax Policy Center? I mean, the Tax Policy Center might not be dead center, but they are just a bit less likely to be horribly biased in the matter than an organization devoted "to defend[ing] the principles and improv[ing] the institutions of American freedom and democratic capitalism..."

EDIT: Not that the substance of the articles differs by all that much, AEI's tweaks the data to be more favorable to their point, but the NYT's shows a similiar trend. I just find it odd that you need to inject a clearly biased source into the conversation when the existing less biased source already demonstrates your point.

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Re: Tax increases in 2011 and 2012

Postby Burzmali » Mon Sep 20, 2010 6:44 pm

Also, if you do the math to compute the tax break per dollar of tax paid according to the NYT article, the top 0.9% are getting 50% more per dollar taxed than the next 75% of the population (who are roughly even, oddly). For example, if the total taxes paid was $100 million, the top 0.9% would be getting back 2.2 cents per dollar paid, while the next 75% would be getting between 1.5 and 1.7 cents per dollar taxed.

So, even normalized, the super rich win, and the change in policy would hit the marginally wealthy the hardest :roll:
Last edited by Burzmali on Mon Sep 20, 2010 7:25 pm, edited 2 times in total.

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Re: Tax increases in 2011 and 2012

Postby Brandybuck » Mon Sep 20, 2010 6:45 pm

Burzmali wrote:I mean, the Tax Policy Center might not be dead center, but they are just a bit less likely to be horribly biased in the matter than an organization devoted "to defend[ing] the principles and improv[ing] the institutions of American freedom and democratic capitalism..."


Ad Hominem, thy name is Burzmali.

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Re: Tax increases in 2011 and 2012

Postby Burzmali » Mon Sep 20, 2010 6:56 pm

Brandybuck wrote:
Burzmali wrote:I mean, the Tax Policy Center might not be dead center, but they are just a bit less likely to be horribly biased in the matter than an organization devoted "to defend[ing] the principles and improv[ing] the institutions of American freedom and democratic capitalism..."


Ad Hominem, thy name is Burzmali.

How so? There is no attack on the Capt. I believe his argument "the rich pay more tax and are entitled to a larger tax break" is questionable because his source is clearly biased when compared to the first article. Second, I did the math in my second post to show that the super rich are still benefitting more per tax dollar paid than everyone else.


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