"It is about "Six Months Until the Largest Tax Increases in History -- In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011." Keep in mind Obama saying, "We need to lay a new and stronger foundation on which businesses can thrive and create jobs," and you tell me if the tax increases that are gonna hit in six months will create an atmosphere or a stronger foundation on which businesses can thrive and create jobs and rising incomes. I don't know what credibility he's got on economic growth. I don't know where in the world he got it. I don't know why he has any credibility at all when he speaks on the economy other than he's the president. He has no credibility. Personal income tax rates will rise. The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed). The lowest rate will rise from 10 to 15 percent. All the rates in between will also rise. Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates. "Personal income tax will rise. 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%. Higher taxes on marriage and family. The 'marriage penalty' (narrower tax brackets for married couples) will return from the first dollar of income. The child tax credit will be cut in half from $1000 to $500 per [crumb cruncher]. The standard deduction will no longer be doubled for married couples relative to the single level. The dependent care and adoption tax credits will be cut." All this while Obama lays a "stronger foundation" on which businesses can thrive and create jobs and rising incomes. The Death Tax will resume. "This year, there is no death tax. For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes and a retirement account could easily pass along a death tax bill to their loved ones. Higher tax rates on savers and investors. The capital gains tax will rise from 15 percent this year to 20 percent in [six months]. The dividends tax will rise from 15 percent this year to 39.6 percent in [six months]. These rates will rise another 3.8 percent in 2013." Then the "second wave" of taxes to hit will be those attached to Obamacare while we are "laying a new and stronger foundation on which businesses can thrive and create jobs and rising incomes." "The 'Medicine Cabinet Tax.' Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines. ... The 'Special Needs Kids Tax' This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500. (Currently, there is no federal government limit.) There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children. There are thousands of families with special needs children in the United States, and many of them use FSAs to pay for special needs education. Tuition rates at one leading school that teaches special needs children in Washington, D.C. (National Child Research Center) can easily exceed $14,000 per year. "Under tax rules, FSA dollars can be used to pay for this type of special needs education," but no more, starting in six months. Then there's "The HSA Withdrawal Tax Hike. This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent." Then there's a "Third Wave: The Alternative Minimum Tax ... will ensnare over 28 million families, up from 4 million last year. ... Small business expensing will be slashed and 50% expensing will disappear." All the while we are "laying a new and stronger foundation on which businesses can thrive and create jobs." So the money saved from depreciation and expenses will now go to the federal government in the form of higher taxes, leaving less money in the business to hire new employees or offer benefits and salary increases to existing employees. In fact, "Taxes will be raised on all types of businesses. There are literally scores of tax hikes on business that will take place. The biggest is the loss of the 'research and experimentation tax credit,' but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs" while we are "laying a new and stronger foundation on which businesses can thrive and create jobs." So basically what we have here is President Obama just lying again as he has been since 2008. On top of all of those taxes that I just mentioned we're going to get the VAT tax, the value-added tax, like they have in Europe. We might even get a net worth tax. They might pass the first-ever-in-history wealth tax. (interruption) Well, I am saying it like it's a fait accompli because that's what this administration intends. Just to help with understanding what expensing means to America. A deduction for up to the entire cost of a depreciable business asset other than real estate in the year purchased, which you may be able to use as an alternative to depreciating the asset over its useful life. The annual limit for tax year 2008 is $250,000. For 2009, it will be $133,000. You cannot use the Section 179 deduction to the extent that it would cause you to report a loss from your business.
