With unemployment rates nearing double-digits status and the federal budget deficit soaring to an unsustainable $1.47 trillion, millions of American families are facing enormous tax increases – at a time when they least can afford it.
A preliminary report, just released by the nonpartisan Joint Committee on Taxation (JCT), said that families will actually bear the brunt of the “tax tsunami” should the 2001 and 2003 tax cuts –a relief plan put forth by President George W. Bush – expire at the end of this year.
Among the most significant family-related tax increases, JCT found that:
- The child tax credit will be cut in half, from $1,000 to $500 per child, costing 31 million families an average of $1,033 in higher taxes next year.
- The marriage penalty in the standard deduction and the 15 percent bracket will be reinstated, costing 35 million married couples an average of $595 in higher taxes in 2011.
- The 10 percent bracket will be eliminated, raising the lowest tax rate to 15 percent, costing 88 million taxpayers an average of $503 in higher taxes next year.
The Heritage Foundation boldly declared, “We are on the precipice of the largest tax increase in United States history. All Americans who earn income will see their taxes go up as a result (even those who work, but don’t pay any federal income taxes), unless Congress acts soon to prevent this massive tax hike.”
Ryan Ellis with The Americans for Tax Reform said that personal income tax rates will rise across the board, the Education Savings Account limit will drastically drop and the estate tax will resurface – just to name a few.
“The ‘marriage penalty’ (narrower tax brackets for married couples) will return from the first dollar of income.” Ellis said. “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.”
“It used to be that people had vague concerns about the deficit. They knew there was one, but it didn’t seem to really matter,” said Republican Minnesota Gov. Tim Pawlenty. “Now average people outside of politics are zoomed in on it. You go to the grocery store or the dry cleaners or some place and average people, they make comments about the debt, the deficit and spending.”
The Obama Administration has repeatedly stated that the Bush tax cuts only benefited the wealthiest Americans. However, the actual running of the numbers indicates 1 in 3 Americans will be adversely impacted.
The Tax Foundation created an income tax calculator website – mytaxburden.org – for families to verify just how much the tax-cut repeal will really affect their bottom line.
The Foundation indicated that a typical married couple with two children under 17, earning $45,000 a year, with no other income, and with $2,500 in state and local tax deductions and $2,500 in real estate taxes would pay approximately $3,002 more in taxes next year should Congress fail to act.
Jenny Tyree, marriage analyst for CitizenLink, said, “Families need a financial break. In their determination to push a political agenda rather than what is best for Americans, this Democrat-led Congress and administration are penalizing the backbone of our culture – married couples with families.”
Tyree said the Obama administration and the Democratic Congress have given lip service to marriage and family; however, their actions have only weakened the ability of families to make decisions consistent with their faith and financial situation.
“Extending the tax credits would give the Obama administration and the Democrat Congress a good opportunity to recognize the importance of marriage and family with actions that will help American families when they need it most,” Tyree said. “It would also give this administration a chance to bolster the institutions that are the bedrock of our society.”
FOR MORE INFORMATION
Calculate your 2011 tax burden.
Read the full list of tax increases in, “Six Months to go until the Largest Tax Hikes in History.”
Read the July 28 FOX News report, “Expiration of Bush Tax Cuts Would Cost Families Thousands in 2011, Study Shows.”
VIDEO: Watch the July 28 FOX interview with Dave Ramsey on ending the Bush-era tax cuts.
Read the Congressional Budget Office’s July 27, 2010 economic and budget issue brief, “Federal Debt and the Risk of a Fiscal Crisis.”
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