As his popularity continues to decline, President Bush has re-introduced legislation to extend his 2001 and 2003 or risk what he is calling “the largest tax increase in history.”
Realistically, some of the cuts will likely be extended or made permanent – but not all. Bush claims, for example, that allowing the tax cuts to expires will add almost $2,000 to the tax bill of a family of four reporting an annual income of $60,000. That kind of hit to the middle class would not survive – especially in an election year.
However, cuts which benefit the wealthy may not survive the cuts. Something has to go and popular opinion supports letting the tax cuts for the wealthy expire first. Why let them expire at all? The current economic situation is already putting a burden on tax revenues. Add in the war in Iraq and the growth in Social Security and Medicare, and the money simply isn’t there to support additional cuts in the form of tax extensions. The Tax Policy Center estimates that extending the cuts for all but the wealthy would still cost taxpayers $783 billion over 10 years.
Yowza. And again, that doesn’t include expiring tax provisions for the wealthy, including the federal estate tax which affects roughly the top 2% of American taxpayers.
You can read the transcript of Bush’s speech here.
Will Congress vote on Inheritance Tax in 2010 or let the tax revert back to
the rate before the bush’s tax cuts?
Congess or the Obama adminstration to do nothing on Inheritance tax would be a large tax increase.