Originally Posted by newtogolf
Let's look at what these tax cuts really do to a small business owner and the middle class;
Estate Gift Tax: The 2012 lifetime estate/gift tax exclusion of $5,120.000 per person expires at end of year and revert back to $1M per person in 2013
Tax Rate on Dividends: Scheduled to increase from 15% up to a potential max of 43%. In 2013 qualified dividends will no longer be taxed at 15% capital gain rate, instead they will be taxed at ordinary income rates which are scheduled to increase to a max of 39.6% in 2013. In addition, dividends will be subject to new 3.8% Medicare surtax
3.8% Surtax: applied to all capital gains on persons earning income over $200K
Additional .9% medicare tax on wages over $200K
Bonus depreciation (50%) and Code Section 179 Expensing - reducing the ability to expense the cost of properly from $139,000 in 2012 down to $25,000 in 2013 on purchase of qualified property.
These are the Bush Tax cuts that will impact not only the wealthy, but anyone managing their own retirement accounts, or small business owners looking to own their buildings instead of rent. That's a potential 10% increase in taxes to small business owners. You don't expect that to have an impact on the economy and unemployment?
Well, I think it is misleading to cut off my quote where you did - they need to make a deal. I hope that was clear.
My post was about strategy - let the Bush cuts expire, wipe the slate clean, and make a new deal retroactive to January 1; or do a deal before December 31.
I'd rather they do a deal beforehand so the markets will not flutter.
They've got to raise revenue and reduce spending, and they can in many ways
[Entitlement Reform - including motivating people to get off the dole, reducing social security payments for those in certain high income strata, reorganizing welfare and social programs to make them more efficient and reduce their spending, etc.
Reorganize the Government so it it motivated to spend less - how about bonuses to employees who save money or don't use up their budget?
Make Defense more efficient to reduce its budget - re-evaluate our Defense Strategy and where troops are situated
Tax Reform - simplify, simplify, simplify
Instead of raising personal income tax rates, I'd keep them as is, and reduce deductions
Have a smaller estate tax with low rates - and make it simpler. It is complex! I think Obama said he'd agree to a $3m exemption
Simplify the income tax and take out favored deductions
Lower Corporate Rates but take out "pet" deductions
Add back small tax increases - capital gains, medicare tax, surtax at low rates.]
Stimulate Business with temporary incentives such as investment tax credits and quicker depreciation.
The point is make the tax system simpler and with lower rates, and reduce your spending, looking for ways to reduce it and make its programs more efficient. Keep the lobbyists out, use common and fiscal sense, and it can be done.