It seems that the end of the year brings with it great uncertainty about our taxes. Tax cuts enacted by Congress in 2001 and 2003 are set to expire, this could mean higher taxes for some Americans.
Both sides of the aisle agree that the middle class should be spared from rising tax rates. While the Democrats are eying the earnings of our nations wealthiest 2%, Republicans are speaking against raising the rates for any American.
The Obama administration favors allowing the Bush tax cuts to expire for wealthier Americans. Treasury Secretary Timothy Geithner this week argued the Administration plan would raise billions for the government with minimal impact on the economy…
Republicans, though, are firmly opposed to the Administration plan. “We don’t believe anybody should face a tax hike, particularly in a recession,” said Don Stewart, press secretary for Republican Senate Minority Leader Mitch McConnell.
Many believe that while the economy is in the shape it’s in, no individual or business would benefit from raising taxes now. For some the belief is that doing so could slow the recovery of our economy. If these cuts expire it will mean that those who are single and earning over $200,000 a year and families bringing home over $250,000 annually may want to brace themselves and considering updating their tax plan.
“Why owe taxes now when you can put them off”
The uncertainty looming ahead has called that old logic into question… some planners are unsure what to tell their clients these days.
The possibility of these changes in the coming months has many of us concerned and wondering if we are going to have to tighten our belts even more. We can only wait and see…