Taxes, Taxes And More Taxes

Statement

Quick Facts

* According to the Tax Foundation, IRS regulations have increased 18.7% since 1995.
* According to the National Taxpayers Union (NTU), in fiscal year 2009, the IRS estimated that individual and business taxpayers spent 7.75 billion hours complying with the tax laws.
* Tax Freedom Day in 1910 was January 19th, when taxes were just 5% of a person's income. Now, as the Tax Foundation points out, Tax Freedom Day is nearly three months later and taxes are more than 26% of a person's income.
* Corporate income taxes cost families over $3,190 a year in increased prices, according to the Tax Foundation.

Impending Tax Increases If Congress Takes No Action

Unless Congress takes action, the following tax increases* will automatically occur for the following tax-years:

2009:

* Small business net operating loss (NOL) carryback period will decrease from 5 to 2 years.

2010

* The exemption for the Alternative Minimum Tax (AMT) will decrease from $46,700 to $33,750 for single filers and from $70,950 to $45,000 for married couples filing jointly.
* Taxpayers will not be allowed to deduct their state and local general sales taxes from their federal income tax.
* Businesses will not be able to claim a tax credit for research, experimentation, and development activities.
* Taxpayers will not be able to adjust their income for qualified tuition and related expenses.
* First-time homebuyers will no longer be able to claim a tax credit of up to $7,500.
* The Section 179 business expensing cap will decrease from $250,000 to $125,000 (plus inflation after 2008), and the starting point for the phase-out of this deduction will decrease from $800,000 to $500,000.

2011

* The marginal income tax rates will increase as follows:
o 35% bracket will increase to 39.6%
o 33% bracket will increase to 36%
o 28% bracket will increase to 31%
o 25% bracket will increase to 28%
o 10% and 15% brackets will condense to 15%
* The capital gains rates for individuals will increase from 15% and 5% to 20% and 10%.
* Dividends will no longer be taxed at the capital gains rates for individuals, thereby increasing the double taxation of dividends by as much as 164%.
* The standard deduction for couples as a percentage of the standard deduction for singles will decrease from 200% to 167%--restoring the marriage penalty.
* The top end of the 15% marginal income tax bracket for couples as a percentage of the top end for singles will decrease from 200% to 167%--restoring the marriage penalty.
* The child tax credit will decrease from $1,000 to $500.
* The "death" tax using the "stepped up" basis will return with a 55% maximum rate (including surtax) and a $1 million exemption, after years of decreasing "death" tax rates, increasing exemptions, and one year using the "carryover" basis to calculate the tax due.
* The $400 "Making Work Pay Credit" will expire.

*This list is not exhaustive. Source: Joint Committee on Taxation and Americans for Tax Reform.

Issa Tax Action

Congressman Issa is a supporter of the following bills to reduce taxes and improve the federal tax system.

* H.R. 982: Because the IRS now lists more than 1,700 publications, forms, and instructions on their website, the American people deserve a completely new tax code.
* H.R. 25: This bill repeals most federal taxes in favor of a national retail sales tax.
* H.R. 87: For the almost 40% of Americans who believe taxes are not high enough, this bill allows taxpayers to designate on their tax returns a payment to the U.S. Treasury.
* H.R. 205: This bill abolishes any form of tax triggered by death, inheritance, and gifting.
* H.R. 213: This bill extends adoption tax relief.
* H.R. 240: This bill eliminates the Alternative Minimum Tax (AMT).
* H.R. 301 and H.R. 4746: These bills make permanent much of the scheduled to expiring tax provisions (see page 1).
* H.R. 470: This bill reduces income and corporate tax rates, providing relief for middle-class families.
* H.R. 1203: This bill allows military members to deduct TRICARE supplemental premiums and to pay TRICARE premiums on a pre-tax basis.
* H.R. 1521: This bill prohibits new state or local cell phone taxes.
* H.R. 1835: Creates alternative energy tax credits
* H.R. 4308: This bill allows taxpayers to designate on their tax returns an amount to go toward deficit reduction.
* H.R. 4735: This bill prohibits individuals who are seriously delinquent on their taxes from federal employment.

Source