11.30.2010 0

The Countdown Has Begun

  • On: 12/01/2010 09:19:52
  • In: Taxes
  • By Rebekah Rast

    Those who are counting down to Christmas know there are only 24 days left.

    This is significant to the politicians on Capitol Hill as well because it means only a few more weeks until the 2001 and 2003 tax cuts expire.

    Congress is aware of this as well as Obama. In a meeting Tuesday they discussed this very issue and the importance of working towards a compromise so America is not plagued with higher taxes as they ring in the New Year.

    The American people have heard a lot about the plans for the income tax rates. Obama would like the tax cuts made permanent for some, but increase taxes on those individuals making more than $200,000 or couples making more than $250,000 a year. Republicans in Congress would like to keep the tax rates the same, not raising taxes on anyone in the midst of this prolonged economic downturn.

    With the income tax rates consuming Congress’ tax agenda, it makes you wonder what’s to come of the other tax rates set to expire come Jan. 1, 2011, including the expiring rates of the capital gains and dividend taxes.

    These taxes should be equally important to any American who owns stock and investments and those who just like to save their money.

    Come Jan. 1, the tax rate of capital gains will rise from 15 percent to 20 percent. The top dividends tax will rise from 15 percent to 39.6 percent. If Congress allows this to happen, it will be a heavy blow to those who save and invest.

    “If the capital gains and dividend taxes increase, then America will suffer,” says Bill Wilson, president of Americans for Limited Government (ALG). “We need to encourage small businesses to grow and Americans to invest in American-owned companies. I sincerely hope that Congress and Obama understand the damage that would be done if these taxes were to increase.”

    A Bloomberg article states Obama’s agenda for the capital gains and dividend tax rates as this: “Obama proposes preserving the 15 percent rates on both for individuals earning less than $200,000 and joint filers earning less than $250,000. He supports allowing the capital gains rate to revert to 20 percent for high earners. He also would cap the dividend tax rate at 20 percent rather than allowing dividends to be taxed as ordinary income.”

    With this in mind, and considering Republicans would like to prevent taxes from going up on all Americans, the meeting between Congressional leaders and Obama didn’t come to any fast conclusions.

    As stated by Politico about the meeting, “On taxes, Obama says ‘there was broad agreement that we need to work together. There are still differences about how to get there… We agreed that there must be some sensible common ground.’ He says he appointed Treasury Secretary Tim Geithner and his new budget director, Jack Lew, to ‘work with representatives of both parties to break through this logjam.’

    “He says the Republicans will do the same, ‘beginning right away,’ and that they’ll get some answers ‘over the next couple of days.’ ”

    The American people hope “the next couple of days” sincerely means in the next two days. Time is running out as well as excuses for having not dealt with this big-ticket item sooner than a lame-duck session.

    Congress only has 24 more links to rip off its Christmas chain. Let the countdown begin.

    Rebekah Rast is a contributing editor to the Americans for Limited Government (ALG) News Bureau.


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