I still remember his words. The President of the United States looked us all in the eye and through the directness of television promised…”I can make a firm pledge, under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes”.
It was not too long ago that I visited with my accountant. For the past thirty years he has prepared my tax returns for me and knows my finances well. He knows I am far removed from making that magical $250,000 a year. He too looked me in the eye and promised…”If the government doesn’t make one more change to the tax code and does nothing to change what will happen next year, your income tax will increase by $3,500.
Who do you think is a liar, the accountant or the president?
The way things stand at this hour; there are a lot of changes coming that we can believe in. We can believe that $338 Billion in tax cuts will expire starting in 2011. The federal government also expects to pick up another $208 Billion by reinstating the personal exemption and eliminating selected itemized deductions. Another $291 Billion will be picked up by limiting the remaining itemized deductions to 28% of their value and $118 billion by increasing the rate of taxation on capital gains.
Those are huge numbers that don’t really touch us as individuals. However, if, as the financial experts tell us, half of the country is invested in the stock market, that means a lot of folks making under $250K hold some kind of negotiable stocks. If the rate of capital gains goes up again…they will have a tax increase. If they sell property and make a profit…they will have a tax increase.
We should not forget that if existing tax laws are allowed to expire, as is now the plan of the Obama Administration, married families with dependent children will see their child tax credit cut in half…and that is a tax increase.
At a time when 14 million Americans and perhaps as many illegal aliens are searching for jobs, the Obama clan is seeking to change business taxation by picking up another $17 Billion through the reinstatement of the superfund taxes $5.3 Billion by increased excise taxes on Gulf of Mexico oil and gas, $3.4 Billion from repeal of expensing drilling costs, plus about another $300 Billion on a wide variety of business tax changes and repeal of existing tax credits. All of that is about to happen either through no action by Congress or legislation while they are assured of having a majority during a lame duck session to follow the November election. There is not a job creating action in any planned or existing legislation.
Now that is change we all can believe in.