Taxpayers on track for unhappy New Year

Unless Congress takes action in the next few months, ALL taxpayers are in for a very unhappy New Year, as the 2001 and 2003 Bush tax cuts are set to expire on December 31st.

The most notable impact will be to personal income tax rates that will start to impact paychecks starting the first week of January:

35% goes to 39.6%
33% goes to 36%
28% goes to 31%
25% goes to 28%
And 10% goes to 15%

Then there's also an increase in estate taxes ("death tax"), dividend taxes, capital gains - and even a return of the marriage tax penalty.  Fun for everyone.

The average family of four would pay almost $3,000 more per year unless current tax law is extended.

Of course this is causing a good bit of problems for Democrats on the campaign trail, as it was their party that demanded that the Bush tax cuts be made temporary (with an automatic sunset provision) to begin with.  Via MSNBC:

On Thursday, House Republican Leader John Boehner of Ohio said he wants an up-or-down vote on extending all the tax cuts before congressional elections in November.

"Raising taxes on anyone, especially small businesses, is the wrong thing to do in a struggling economy," Boehner said. "On the issue of job killing tax hikes the American people are not going to accept anything less than the vote that they deserve."

House Speaker Nancy Pelosi, D-Calif., wouldn't commit to vote on any tax proposals before the election. She did, however, pledge to address them by the end of the year.

The irony is that they are set to expire before a mid-term election where pretty much every poll indicates Democrats are in for a record beating...which might explain why 31 of the more vulnerable Democrats have signed a letter to Pelosi calling for the tax cuts to be extended.

There's nothing like a pending election to focus the mind.


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