WANT TO SEE HOW THE TAX PROPOSALS WILL IMPACT YOU?

The tax foundation has updated their interactive calculator at www.MyTaxBurden.org to include the Democrats’ plan for the expiring Bush-era tax cuts recently scored by the Joint Committee on Taxation.

Now you can compare you 2011 federal income tax liabilities under four policy scenarios:

(1) All the tax cuts expire completely at the end of this year
(2) All the tax cuts are extended into 2011 or made permanent
(3) President Obama’s budget is adopted, which would allow the tax cuts to expire for families making over $250,000 a year (singles making over $200,000), extend some stimulus measures and impose new limitations on itemized deductions
(4) Congressional Democrats’ recent proposal is adopted, which is similar to the Obama plan but does not extend stimulus measures or include additional limits on itemized deductions.

All you have to do is type in basic information – such as filing status, wage income and number of dependents – along with optional more detailed information – such as capital gains and dividend income, state and local taxes paid and other itemized deductions – and determine what your federal income tax burden would be in 2011.

HOW WOULD THE EXPIRATION OF THE BUSH-ERA TAX CUTS AFFECT AVERAGE MIDDLE-INCOME?

Nationally, the typical middle-income family, which has a median income of $63,366, would see its federal income tax burden increase by $1,540 if the Bush-era tax cuts expire.

A new report by the Tax Foundation shows how the expiration of the Bush-era tax cuts would affect the average middle-income family in each state and congressional district. The report looks at the average family in the middle 20 percent of the income spectrum and compares their 2011 federal income tax liability if all the tax cuts expire to their tax bill if all the tax cuts are extended.

BUSH TAX CUTS

If you are interested in the debate on letting the Bush Tax Cuts expire I have harvested some of the pro and con articles. My thinking is that I agree with the first article that increasing taxes in actuality slows down revenue. I can give you examples of clients that did not expand their businesses during the high Carter tax years because the government was going to get up to 80% of any profit that was made. Here is a quote from President Kennedy on taxes that is in the Soak the Rich Catch-22 piece.

"Tax reduction thus sets off a process that can bring gains for everyone, gains won by marshalling resources that would otherwise stand idle—workers without jobs and farm and factory capacity without markets. Yet many taxpayers seemed prepared to deny the nation the fruits of tax reduction because they question the financial soundness of reducing taxes when the federal budget is already in deficit. Let me make clear why, in today's economy, fiscal prudence and responsibility call for tax reduction even if it temporarily enlarged the federal deficit—why reducing taxes is the best way open to us to increase revenues."
—President John F. Kennedy,
Economic Report of the President

The Soak-the-Rich Catch-22

To deal with the deficit, let the tax cuts expire

A tax increase in these uncertain economic times would be devastating.

Pending tax hikes cause Democratic tension

Liberal Tax Revolt Game-Changer

The calamitous effects of Obama's tax hikes

Pence promises full-fledged GOP campaign to keep Bush tax cuts

Tax hikes for the rich: Can the economy afford them?

Battle Looms in Washington Over Expiring Tax Cuts

Geithner says allowing tax cuts for wealthy to expire would be responsible thing to do