Expiration of Bush Tax Cuts: How Will It Affect You?

October 12, 2010 12:35

Unless Congress acts soon, almost all of the “Bush tax cuts” and credits that were enacted in 2001 and 2003 will expire at the end of this year. Most financial analysts and Washington insiders say they don’t expect that to happen. But if it does, you — the American taxpayer — are in for a tax hike. A big one.

By Joshua Rhett Miller at FOXNews.com


Benjamin Franklin wrote that “nothing is certain but death and taxes,” but that is only half-true. There is absolutely nothing dead-certain about taxes this year.

Here’s what it will mean to you:

— The standard percent rates — the baseline percentage of your income that goes to the government — will universally rise, at an estimated cost of roughly $157 billion annually; from 10 percent to 15 (for lowest-income earners), from 25 percent to 28, from 28 percent to 31, from 33 percent to 36, and from 35 percent to 39.6 percent (for highest-income earners).

— Indexing of the alternative minimum tax (AMT), which ensures that taxpayers who benefit from itemized reductions and/or credits pay a separately calculated minimum tax, will expire.

— Taxes on capital gains and dividends will increase, potentially costing investors an estimated $35 billion annually.


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