Higher Tax Brackets for Almost Everyone in Expiring Bush Tax Cuts
Here's something you haven't heard from the Obama campaign.Allowing for the expiration of the Bush-era tax cuts will have a devastating effect on all taxpayers' income levels. That includes the lowest-earning Americans much to the loud protests from the Obama spin machine.
In August, 2012, the Bureau of Labor Statistics released their consumer price index figures which usually become the final piece in the puzzle for information required for the coming year's federal income tax brackets.
Calculating 2013 Tax Brackets
As the BLS noted, "Projecting 2013's brackets is more complicated than usual given the uncertainty surrounding the potential expiration of the Bush cuts, originally enacted in 2001 and 2003, and more recent stimulus bill tax cuts originally passed in 2009."
They continue, "But since tax parameters are adjusted for inflation in more or less the same way, the Tax Foundation can project next year's parameters under a variety of scenarios with a high degree of certainty."
Here's How It Works
With the Bush tax cuts in place, lower-income married joint filers pay a rate of 10 percent up to earnings of $17,900. But if the cuts expire, they would be boosted into the 15 percent bracket, which extends all the way to earnings of $60,550.
Taxpayers earning from $72,500 to $146,400 currently pay a rate of 25 percent. Without the Bush cuts, earnings up to $146,400 will be taxed at the rate of 28 percent.
The 28 percent bracket currently covers married joint filers earning from $146,400 to $223,050. Without the cuts, their rate will rise to 31 percent.
Similarly, the current 33 percent bracket will increase to 36 percent without the Bush cuts, and the top bracket, 35 percent, will rise to 39.6 percent for those earning $398,350 or more.
Single filers and head of household filers will see comparable tax increases if the Bush-era cuts are allowed to expire next year.
The picture of the country with and without the tax cuts is startling in the recent and ongoing recession. The results without could be catastrophic.
Under President Obama's 2013 budget, the cuts would expire only for those earning $247,000 or more.
The expiration of these cuts would affect all standard deductions for married filers and the Earned Income Tax Credit, among many other factors.
A lot to think about before entering the voting booth.
* If you have enjoyed this column, may I suggest you scroll down this page and press the SUBSCRIBE box? It's FREE. Thank you for your patronage.
** Send your comments to: dwight.schwab@gm
Dwight L. Schwab Jr. is a moderate conservative who looks at all sides of a story, then speaks his mind. His BS in journalism from University of Oregon with minors in political science and American history stands him in good stead for his writing. Read more stories by Dwight L. Schwab Jr..
* The views of Opinion writers do not necessarily reflect the views of NewsBlaze
Related Business News