The Largest Tax Increase in U.S. History Will Occur in less than 65 Days!

Will the White House and Congress take action between now and December 31, 2010 to prevent the biggest tax increase in US History? That is yet to be seen, but going into the November 2nd Mid-Term election the White House has reaffirmed its position that it will allow the automatic tax increase to occur for the “rich.” There is suggestion that the “rich” are not paying enough. Let’s see who is “rich” and what the “rich” are really paying. Odds are you are one of the “rich.” If you earned above $113,799 (Adjusted Gross Income) in 2008, you were in the top 10% of all income tax earners – you were “rich.” How much did the “rich” pay according to the latest IRS statistics (the 2008 numbers were just released):

• The top 10% of income tax payers are everyone that has an AGI above $113,799 – you paid 69.9% of all federal income taxes
• The top 5% of income tax payers are everyone that has an AGI above $159,610 – you paid 58.7% of all federal income taxes
• The top 1% of income tax payers are everyone that has an AGI above $380,354 – you paid 38% of all federal income taxes

The Tax Increases
The tax increase that will automatically come to pass on January 1, 2011 will hit you at virtually every level:

Increased Income Taxes

• The 10% bracket rises to an expanded 15%
• The 25% bracket rises to 28%
• The 28% bracket rises to 31%
• The 33% bracket rises to 36%
• The 35% bracket rises to 39.6%
• The child tax credit will be cut in half from $1000 to $500 per child.

Increased Capital Gains Taxes

• The 15% bracket becomes 20%

Increased Dividend Taxes

• The 15% bracket rises to 39.6%

Increased Estate/Death and Transfer Taxes

• The death tax goes from 0% to 55% for estates over $1 million
• The gift tax goes from 35% to 55%

Increased Alternative Minimum Tax

• Will jump from 4 million taxpayers to over 28 million taxpayers