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Reply #14: Well unless Congress acts all provisions of Bush tax cut expire... [View All]

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Statistical Donating Member (1000+ posts) Send PM | Profile | Ignore Mon Apr-19-10 07:49 AM
Response to Reply #4
14. Well unless Congress acts all provisions of Bush tax cut expire...
Edited on Mon Apr-19-10 08:02 AM by Statistical
Prior to Bush tax cuts the tax brackets (5) were:
15%
28%
33%
36%
39.6%.

The tax cuts split the 15% bracket into a 10% & 15% bracket and then lowered each of the other brackets to 25%, 28%, 33%, 35% respectively.

Thus it became 6 brackets:
10%
15%
25%
28%
33%
35%

The amount in each bracket varies based on inflation and is published by IRS each year but the tax cuts didn't directly change that.


If Congress does nothing than every single provision expires (even tax cuts for the poorest of poor):
10% -> 15% (50% increase in tax rate)
15% -> 15% (no change but obviously someone in 15% bracket is also substantially affected by 10% bracket change)
25% -> 28%
28% -> 33%
33% -> 36%
35% -> 39.6%

During campaign Obama had talked about only allowing the tax cuts for "rich" expire. I would take that to be the top 2 brackets.

However that requires action on the part of Congress

Without action all tax brackets will revert to Clinton tax levels. Sadly I haven't heard a peep out of Congress so action seems unlikely.
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