Wednesday, October 13, 2010

The Biggest Tax Hike Ever? It Depends on Who You Ask -

Tax FoundationImage via Wikipedia
Is America headed for its biggest tax hike since World War II?
The answer, nonpartisan fiscal watchdogs say, is yes -- but with a big "if" and a few caveats.
If Congress returns after the Nov. 2 midterm elections and does nothing, allowing the Bush tax cuts to expire, then New Year's Day will usher in the nation's biggest tax increase since the end of World War II, according to Bill Ahern, spokesman for the Tax Foundation, a nonpartisan tax monitoring group.
“If nothing happens in Congress -- and that is a possibility -- and all the tax cuts are allowed to expire, the median American family will see a smaller paycheck and a tax increase of $1,540 on January 1,” Ahern said.
And that could be just a start.
“If there is total gridlock, then there will be additional tax breaks that will expire not connected to the Bush cuts,” he said, noting that if this happens, then Americans' taxes would grow higher. Among those are the “patch” to the Alternative Minimum Tax (AMT), the estate tax and a host of temporary tax cuts the Obama administration implemented as part of the stimulus package.
“Not patching the AMT would cost an additional $70 billion” to taxpayers, Ahern said.
Expiration of Bush Tax Cuts: How It Will Affect You
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