Expiring Tax Cuts=Tax Increases
Unless Congress and President Obama take action, the so-called Bush tax cuts will expire at the end of the year. Despite the rhetoric, it ain’t just “the rich” who will be affected, folks. Here are a couple of the expiring cuts that will affect us “working class” people.
1) The tax brackets will go up from 10%, 15%, 25%, 28%, 33% and 35%, respectively, to 15%, 28%, 31%, 36% and 39.6%. Even if the bracket definitions are changed, that’s still an increase for most of the workin’ people.
2) People in the lowest two brackets (10% and 15%) pay 0% tax on investment profits. That will go up to 10% on long-term gains and 15% and 28% on dividends.
3) Married couples get twice the deduction of singles. Next year, this will fall to 167%. The marriage penalty is back.