Get ready: A raft of new taxes are coming next year
atr.org
atr.org
"Small business expensing will be slashed and 50% expensing will disappear. Small businesses can normally expense (rather than slowly-deduct, or “depreciate”) equipment purchases up to $250,000. This will be cut all the way down to $25,000. Larger businesses can expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”"
The 'about' page shows that they're heavily partisan, no shocker there.
Back in reality, the nearest I can see from the tax code is that a large number of previous cuts made during the Bush administration will expire as planned, and that most of these will apply only to the highest income bracket.
Anybody with greater insight care to share?
It would be very difficult, in this day and age, to be a pro-lower-taxes group which wasn't heavily partisan.
BushCo is a bit different, because there is no such entity as BushCo, by that name or any other.
If anyone has corroborated his claims using non-wingnut sources, I would be interested to read about it. Until then, I'm taking this with a huge grain of salt.
If I recall correctly, those cuts were strongly criticized at the time as being unsustainable and likely to lead to huge budget deficits. Rather than fix the core financial problems at the time, a tax cut was used to punt unpopular measures into the next administration.
I guess those problems could continue to be ignored for the sake of popularity, but that plan hasn't worked very well so far.
Edit: For the downvote brigade; no, those cuts did not help you: http://www.economist.com/blogs/freeexchange/2009/01/tax_cuts...
There is another option. The stuff the taxes were paying for could be stripped from the budget.
Rather than fix the core financial problems at the time, a tax cut was used to punt unpopular measures into the next administration.
Perhaps this time they should think about a more permanent fix. As unsustainable as the tax cuts may have been, monotonically increasing taxes are also unsustainable.
The purpose of taxes is not to tweak the economy. It's just that taxes, and government spending overall, is such an enormous proportion of the economy that it's possible for them to have such an effect. I submit that it would be better to eliminate the use of the economy as a partisan lever by allowing we the people to decide how our money should be used.
EDIT: put in the word "been" I'd missed in 3rd para.
A 'permanent fix' would involve either eliminating programs or raising sufficient funds to actually pay for them. Which subsidies which you personally benefit from would you like to see stripped out? Deductible mortgage interest? Cheaper cars? Lower gasoline costs? Cheaper food? You're paying for all of those now.
It's widely perceived that the massive and ongoing changes in the business environment have caused a lot of companies to effectively freeze or cut back until they see how it all plays out (note that one has also got to be concerned about second order and so on effects, that which trashes you may also be trashing your customers, your customers' customers, etc.).
Even the left is starting to acknowledge it; from the site run by the guy who helped to expose the polling firm that was scamming the Daily Kos, the last paragraph of an essay on "Why Aren't Businesses Hiring?":
"Uncertainty: there has been a tremendous amount of change over the last 12 months. Businesses are still trying to figure out what that means for their bottom line. Until there are firm answers, they will freeze hiring."
Fred Wilson recently discussed "Currency Risk In A Business" (http://www.avc.com/a_vc/2010/07/currency-risk-in-a-business.... which was submitted to HN but seems to have disappeared). However, it looks like hedging that will get a lot more expensive: WSJ: http://www.google.com/search?q=%22facing+higher+retiree+heal...)
Which as the WSJ editorial notes "If hedging currency risk becomes too expensive, companies may shift more jobs to countries where the purchases occur, matching their revenues to expenses in the same currency.", in alignment with Fred's comments that "It is ideal to have your foreign currency denominated expenses and revenues be as close to each other as possible. Because if you can do that, they are a natural hedge."
so that consumers don't get punished in the end with new fees and higher costs
The degree to which this is true depends on the products involved. It all turns on the elasticity of demand for that product. Basically, if you're unlikely to significantly curtail your usage of -- e.g., oil or tobacco -- then the consumer will bear the brunt of any tax increase to the business. But if it's related to products that you're more inclined to put off a purchase due to price sensitivity, then the taxes will tend to come out of corporate profits.
The only reason it might have any bearing on HN is the small-business angle, but again, the obvious political slant of the article negates that pretty effectively...which is a shame, given that it does have some useful numbers.
- 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 capital gains tax will rise from 15 percent this year to 20 percent in 2011. The dividends tax will rise from 15 percent this year to 39.6 percent in 2011. These rates will rise another 3.8 percent in 2013.
I live in California - 10% state tax. Also 10% sales tax and 10% tip.
I am seriously thinking of dropping my US citizenship (I am dual-citizen)....have people explored this before?
Some of the increases are the result of expiration of the Bush tax cuts.
Others are new, the result of healthcare initiatives and other programs.
That said, while some of the HCR provisions resulted in new limits and exemptions on tax-free HSA/FSA accounts and the like, there really isn't a new "health care" tax.
Some of the other items on the list, like the AMT thing, has little to do with the current administration - it's a perennial issue that Congress "fixes" every year. (Which isn't to say that it's not a problem that they should just address one way or another, but it's silly to blame the AMT on anything new from Obama - it happens every single freaking year).
A few of the other items are downright laughable - they're expirations of temporary tax cuts or programs that were part of the stimulus (the stimulus that, FWIW, most conservatives opposed).
What I didn't realise at the time was that you can add an extra 10% or so in state taxes onto the quoted rates (or live the desert and pay an equivalent amount in property taxes). Australia may have a 48.5% (last I checked) top tax rate, but at least once you've paid that you're basically done.
http://www.mydollarplan.com/tax-brackets/
Does anybody know when the each year's tax rates are effectively set in stone?
I don't remember, why did you guys vote Obama again? :)
"Free" health care ain't free. You pay through the nose in taxes and in lost time. And even then, I usually fly to other countries (US) and pay full price for specialized interventions.
Because with the "free" health care you ca lose your life. It's free and you get your money's worth.
Or you're all in the peanut gallery happy to pay with somebody else's money but never actually understanding what it takes to be a business owner in this world?
Cause it seems a pretty strong democrat bias in what should be an entrepreneur's forum. And one should have one's head pretty far up one's... bias to ignore the signs you country is becoming less and less business-friendly and more and momre of a welfare state.
Even if you don't though, I think you could make a strong argument to vote Democrat purely on how terribly the Republicans run the country.
I'm not being snarky, I'm actually curious. I look at western Europe and by and large I see clean, pleasant cities with low crime, lots of parks, museums and other amenities. In short, nice places to live. I don't know that has anything to do with their "high" tax rates and "socialist" leanings, but I suspect it might.