Could Tax Day 2013 bring ‘Taxmageddon’?
April 19, 2012
Most dread tax day when it rolls around yearly like clockwork, except those who don’t generate enough income to owe the government. But even this isn’t good, for as I was once told, “Not owing any taxes means that you haven’t made any money.”
Even so, many times a tax return must be filled out and submitted. This does take a certain amount of consideration and planning to accomplish.
On Tuesday, April 17, as anticipated, long lines formed at some post offices as procrastination resulted in a last minute rush to file 2011 income tax returns on time.
Perhaps your 2011 income taxes were in line with your expectations, but come Jan. 1, 2013, you might be in for a big surprise when a massive tax increase kicks in which the Washington Post called ”Taxmageddon.”
Without question, the scheduled January 13 tax increases would hurt proportionally lower and middle class Americans.
Full details of all seven tax hikes can be found at the following link: http://thf_media.s3.amazonaws.com/2012/pdf/ib3558.pdf
1. Expiration of the 2001 and 2003 Bush tax cuts.
2. Expiration of once-temporary payroll tax cut will expire.
3. Expiration of the patch on the Alternative Minimum Tax (AMT).
4. Expiration of the tax cuts contained in the 2009 stimulus.
5. Expiration of the “tax extenders,” a group of about 50 tax policies that are renewed regularly for a year or two.
6. Death tax rate will rise from 35% today to 55% and the exemption will fall from $5 million to $3.5 million.
7. Full expensing of new business capital investment.
As for Obamacare, the most damaging tax increase in the law is the start of the Hospital Insurance 3.8 percent surtax on wages and salaries over $350,000 and investment income over that amount.
While it is imperative that President Obama and Congress act promptly to stop the above enumerated tax increases from kicking in on Jan. 1, 2013, will they?
There are good reasons for dealing with the approaching 2013 tax increases without delay even though January, 2013 is nine months off. The Heritage Foundation entertains the following reason:
“Families businesses, and investors need to know how much tax they will pay in the future before making important economic decisions. The uncertainty caused by Taxmageddon means they are stuck in neutral while they wait for President Obama and Congress to act. This is slowing job creation and stopping many of the millions of unemployed Americans from going back to work.”
Despite the consequences of not acting promptly to stem the approaching tax increases, it is highly doubtful that anything meaningful will be accomplished in an election year, the results of which could determine the future direction of this nation. The question to be decided: Will big government prevail or will the free enterprise system survive with freedom of choice as a continuing option for the American people?
How convenient it is that none of the new taxes slated to begin on Jan. 1, 2013, are due to expire until two months after election day. As a result, any overtures made to fix the monumental tax increases scheduled to commence on January 1st of 2013 can’t possibly be attended to with the thoughtful and careful attention and time that would be demanded of our legislators.
Additionally, the tax issues would have to be dealt with during the “Lame Duck” session of Congress and would be voted upon, not only by members who will be around in 2013, but also by those who either decided not to run again or who were voted out of office in the upcoming November elections.
Either way, with non-action or an attempt to act during a Lame Duck session prior to the January 1, 2013, deadline, Taxmageddon would descend like a hammer upon taxpayers in 2013.