Speaker of the House proposes tax hike for millionaires
In a recent proposition made by the Speaker of the House, John Boehner, an increase in federal income tax for the wealthiest Americans could be made, but only in exchange for an agreement by President Obama to make a major cut to entitlements.
This proposition would mark the first time that Speaker Boehner has offered a rise in marginal federal income tax rates since the talks regarding the fiscal cliff have begun. The offer proposed suggested a hike in Bush-era federal income tax rates for those who have an annual income of one million dollars or more.
As a part of the proposition Speaker Boehner also is looking to implement a new method, “Chained CPI”, for calculating the benefits of entitlement programs. By using this method the growth of federal health programs, such as Medicare, would slow down, saving billions of dollars over the next ten years.
Although the proposition did make strides in terms of federal income tax increases, there was nothing included to extend the federal unemployment benefits and no mention was made about how sequestration would be addressed.
A deal is not close to be made, but a phone conversation, after a recent face to face session, between President Obama and Speaker Boehner suggested that both parties are making progress in their negotiations.
The offer on federal income tax by Speaker Boehner was a significant move towards the position held by President Obama. Unfortunately the overall proposal still is unacceptable to the Democrats considering the level of revenue, the hit beneficiaries would take from the changes to entitlement programs, and the lack of extension to the federal unemployment benefits.
Categories: Federal Tax, Income Tax, Tax Law Tags: buffet rule, federal income tax, federal tax, fiscal cliff, fiscall cliff, take hike, tax code, tax cuts, tax law, tax pledge, tax reform, tax the rich
$4,000 tax hike for all
Washington- With the way things are heading with this do nothing Congress in regards to making a compromise to avert the fiscal cliff. Countless Americans will be the victims of a sizable tax increase after America falls of the impending fiscal cliff.
What a majority of Americans fail to realize is that their taxes have already gone up. Over 70 tax cuts expired at the end of 2011 which were not renewed. If Congress does not go back and retroactively extend them a typical middle class family could be hit with a $4,000 tax hike when they file their taxes in 2012.
Businesses as well fare to lose dozens of breaks that they have become accustomed to over the years. These tax increases will come from the lost of tax credits given for R & D, expansions or upgrades and tax breaks for financial companies with an overseas presence.
Even if this do nothing Congress does take action it could fare for a big confusing mess for taxpayers to figure out their 2012 tax bills.
“We’re really expecting this upcoming tax season to be one of the more challenging ones on record,” said Kathy Pickering, executive director of The Tax Institute at H&R Block. “For your 2012 returns there’s so much confusion about what will be impacted.”
Much of the squabble in Congress right now is focusing on NEW tax increases that will take effect next year. These Bush era tax cuts we have enjoyed for years and now they are scheduled to expire. Also a temporary tax credit on social security is set to expire as well.
Obama is proposing on extending tax cuts for everyone making $250,000 or less and letting tax cuts expire for those individuals that make more that that. If any of you have been following the tax rates enjoyed by the wealthy they currently enjoy not only some of the lowest tax rates in history, they also pay much less than those making less than them. One of the many joys of being able to hire your own accountants and being able to bribe those individuals responsible for making tax legislation decisions.
House Speaker John Boehner and other Republicans have said they are open to more tax revenue through reducing or eliminating unspecified tax breaks. Boehner finally conceded saying that he will raise rates on those earning 1 million dollars or more in exchange for very very deep spending cuts. A move that didn’t go over well with Obama. Although they say no news is good news this is at least a suggested attempt at negotiations between the two parties.
Unfortunately lost in this whole mess is the tax breaks that have already expired in 2011. Only time will tell if one of the worst congresses in history will get its act together and make some positive change for the American people.
Categories: Federal Tax, Income Tax Tags: do nothing congress, federal income tax, federal tax, fiscall cliff, income tax, republican, Republican Tax, take hike, tax increase, tax law
‘Fiscal Cliff’ talks still uncertain.
It’s less than a month before the ‘fiscal cliff’ but the White House and the Congress are yet to reach a common ground.
Last week, the White House delivered a $1.6 trillion proposal that presses for higher federal tax rates on higher income tax brackets- as well as the power for the President to raise the national debt limit- in an effort to tame the effects of the impending year-end fiscal disaster. Republicans were quick to counter the White House plan with their version of ‘fiscal cliff’ proposal submitted to the Congress on Monday. Republicans strongly oppose federal tax rate increase, and instead aims to avert the effects of tax cut expirations and automatic federal tax rate increases by curbing federal spending on benefit programs such as Medicare and Medicaid.
White House and Republican point persons have been busily running around this week- appearing on interviews to reiterate why or why not federal taxes should increase- but there is still very little progress in the negotiations. Based on the current pace of negotiations, an understanding may not be reached until the day before the ‘fiscal cliff.’
The ‘fiscal cliff’ is the term used to refer to the fiscal crisis to be faced by the US government by the end of 2012 due to the concurrent expiration of federal unemployment benefits and the Bush federal tax cuts, as well as the commencement of the Budget Control Act of 2011. Federal tax rates for payrolls will rise from 4.2 to 6.2 percent and taxpayers will have to pay additional federal taxes for Medicare.
Categories: Federal Tax Tags: buffet rule, federal income tax, federal tax, fiscall cliff, income tax, republican, tax code, tax law, tax reform