The Heritage Foundation is a conservative think tank but I found their recent column quite true. I have been trying to warn people that if Congress and the President don’t act taxes are going to increase dramatically. While the President and Congress appear content to put off ’til the 11th hour what they can and should do today, those who will have to pay the higher tax burden are waiting to see what the future holds. It appears that many businesses are waiting to see what will happen and this may be slowing job creation.
In their analysis, they write "Brace yourself. In (less than 270) days, you and your fellow Americans will be hit with a tax hike the likes of which this country has never seen," if Congress does nothing by year's end. "The Washington Post aptly called the unprecedented $494 billion tax hike 'Taxmageddon.'" According to the analysis, "almost 34% of the tax increase" is from the expiration of the 2001 and 2003 Bush tax cuts, while "another 25% of Taxmageddon comes from the expiration of the once-temporary payroll tax cut." The expiration of the patch on the Alternative Minimum Tax accounts for 24% of the total potential 2013 tax increase. The rest of the tax increase "comes in part from new taxes under Obamacare, the expiration of tax cuts in the 2009 stimulus, the expiration of a group of policies known as 'tax extenders,' changes in the current policy on the death tax (in 2013, it will rise from 35% today to 55% and the exemption will fall from $5 million to $3.5 million), and the expiration of businesses' ability to fully expense new capital investments."
