I now see why I did not become an accountant. When I try to figure out the IRS tax code it reminds me of a saying I once heard; if you can't dazzle them with brilliance, baffle them with bulls**t. Politicians have mastered this art and doing the research to cut through it all is not my idea of a good time.
In Part 2 of my special report about the new Obama budget I want to explore the evil Bush tax cuts that we are constantly hearing about. This issue has been exploited by the Democrats and our President in a way that is nothing short of deplorable. The amount of misinformation pumped out by the class warfare machine is hard to keep up with so I have tried to simplify it as much as possible.
The question at hand is what will happen when the Bush tax cuts expire besides make those horrible rich people pay more in taxes? The answer is that your taxes are going up too. If you fall into the 25% Tax Bracket (about $33,000 to $82,000 per year) you are being moved from the 25% to 28% Tax Bracket. Maybe this only equals out to $500 per year but if I held you up at gunpoint and took that money I suspect that you would be a little upset. If you happen to be one of those forward thinking individuals that have investments that pay a dividend well then maybe you should sit down first. The tax on your dividend is about to jump from 15% to 39.6%
Just as a side note, the top 1% (Those making about $350,000 per year and up) pay 40% of all Federal Income Taxes and the top 10% ($100,000 per year and up) pay over 70%. This is important to know since you constantly hear about how the rich need to be taxed more. In addition to that there is the Alternative Minimum Tax that was designed to prevent crafty CPAs from eliminating the tax burden of the wealthy. Unfortunately the AMT was not indexed for inflation and those in the upper middle class income range are now getting hit by the AMT.
I can understand why you might have liked the tone and spirit behind the campaign and election of President Obama. He is an intelligent and charismatic man but trying to raise revenue by taxing more is not only a historically counterproductive way to raise federal revenue, it punishes the very people who he was elected to help, the middle class.
Stay Sharp!
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