Monday, November 28, 2011

The Tax Mess Deepens

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As Congress and the Administration struggle to come up with any kind of fiscal policy other than spend, spend, spend, a number of tax increases will kick in over the next two years:

Expiring in 2011
• 2% Social Security payroll-tax cut for employees
• Alternative minimum tax patch
• IRA charitable contribution for people older than 70½.

Expiring in 2012
• Bush tax cuts of 2001 and 2003.
• top tax rate on wages reset to 39.6% from 35%
• top rate on long-term capital gains to 20% from 15%
• Special 15% rate on dividends
• estate-tax provisions.
• 10 million lower-income families and individuals restored to the tax rolls

These additional revenues may help the deficit, at least be prepared to hear that the argument from the mainstream media, but recent history shows that Congressional spending increases will outstrip any increases in revenue.  That looks like a trend no one is willing to stop.

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