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Solution Submitted By:
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Many of the tax breaks we have been enjoying for the past few years will disappear in 2010 unless Congress acts to renew them. These tax breaks have been portrayed as tax cuts for the rich. This is absolutely false. The taxpayers who will be harmed the most are married filing joint, middle income taxpayers (earning $40,000-$130,000/year) with children under age seventeen. Those taxpayers could owe $1,000 more tax per qualifying child with the loss of just one tax break, the child tax credit.
Other tax breaks that are scheduled to expire include:
Partial fix of the marriage penalty
Improvements to the alternative minimum tax (AMT)
Increased exemptions from estate tax
As a CPA, during tax season next year, I plan to inform every one of my clients how much additional income tax they will owe if the Congress does not extend the tax breaks.
My solution is to encourage every tax preparer in the country to do the same. Also, every taxpayer should be encouraged to ask their tax preparer for this information.
Informing voting taxpayers of the additional amount they will owe if Congress does nothing, and lets these tax breaks end, will ensure that we elect a Congress in 2008 that is working for us.
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May 16th, 2007 at 1:56 am
I think we call all agree that we are all “married filing joint, middle income taxpayers (earning $40,000-$130,000/year) with children under age seventeen.” This is what the American dream is all about: having kids that never exceed age 17, and having an income under $130K per year. We need to preserve the current tax code (I refuse to call them ‘tax breaks’ because I don’t want to see what happens when the ‘break’ ends) so that our country is permanantly in debt to China, Europe and the rest of the world with permanant foreign account deficeits. A strong America is one where people that can afford a CPA can work for a foriegn company, as long as they don’t work in manufacuting, which will be off-shored whether you can afford a CPA or not.
May 17th, 2007 at 11:17 am
Beat this drum again. Fair Tax.
May 18th, 2007 at 8:19 am
Who’s this “we” you refer to?
Most people’s tax bills have gone up - the tax cuts benefitted the top 1%.
http://www.nytimes.com/2007/01/08/washington/08tax.html?ex=1325912400&en=e1dc82f54ac7eacb&ei=5090
May 18th, 2007 at 8:12 pm
Response to Just passing by,
The “we” to whom I refer is the group detailed in my solution.
How many income tax returns did you prepare last year? How many did you prepare before and after President Bush’s tax cuts took effect?
I have prepared hundreds a year since 1984. My many clients who earned between $40,000 and $130,000 and who have children under age 17, saw their taxes decline after the passage of President Bush’s tax cuts. Those same clients will likely see their taxes increase by several thousand dollars should these tax breaks be allowed to expire.
You have been sadly misled by the media and the Democrats if you believe what you wrote. It is absolutely and demonstrably false.
September 6th, 2007 at 12:37 am
I am a businessman in New Orleans and am astounded by the number of people who are underground cash earners who pay zero taxes per year.
Generally, these people do not own investments that generate 1099 (interest and dividend etc.) and not to mention W-2 income. However they are consumers of product. If we were to abolish the IRS and place a value added tax of 23% (like Europe) on all goods, including gasoline, with the exception of food, then everyone from prostitutes to crack dealers would pay taxes. This would lower tax rates and the only tax form I propose would be a tax refund for the very poor and the elderly on Social Security. This would also include foreign goods imported for sale in the U.S.
Keep in mind that products would still be cheaper for you to purchase because products are purchased with after tax dollars (now approximately 30 to 35%)
The math works like this on a one hundred dollar purchase. Now you earn $130.00 to pay for $100 in product. Under a program with no IRS the same $100 in product would cost $123.00. The tax savings are due to EVERY consumer paying taxes.
September 6th, 2007 at 12:54 am
One thing I forgot to say that the twenty three percent would also pertain to any money transferred out of the country. I live in New Orleans where we have a huge influx of illegals working to repair Katrina storm damage and they line up every payday to wire hundreds of thousands of dollars via Western Union to their home countries.
Because they are illegal, employers are withholding payroll taxes from their pay and not sending the tax money to the IRS. The illegal worker cannot complain by the very fact they are illegal. Under the VAT, there are NO TAXES taken from payroll.
Every transaction Western Union and other financial institutions make has to be accounted for in order to balance their books thus making it easy for the government to oversee the collection of this method of tax collection. Everyone would now be free to invest in stocks, real estate, securities that would help them to accumulate money for the future, thus cutting down on welfare we have to pay for people who have not previously paid into social security.
September 6th, 2007 at 1:05 am
I should have also added the people who are now in the underground cash society who claim to be poor (but are cash rich) and do not provide for their own futures and are able to enter the welfare system that you and I pay for.
November 7th, 2007 at 11:34 am
While reading through this thread, I see complaints of “save my cuts,” “cuts only benefit the rich,” and “some pay no taxes.” There is one solution that elimates all of these complaints — a consumption tax.
By instituting a consuption tax (excluding food and medicine), we will stop this class warfare and accusations that each tax group pays more than its “fair” share.
It took Steve in New Orleans a while to get there, but he is right. Institute a VAT and all of these distracting tax issues go away. I’ll save the welfare system issue for another day.
November 17th, 2007 at 6:49 pm
I had reservations about the consumption tax, but if it doesn’t apply to food, medicine, or medical services, and if you don’t have to spend hours on tax preparation (to do my own, takes me about 8 hrs, not including storing and finding documents) 23% doesn’t sound too bad. But what about the goods that already have heavy taxes built in? Gas, cigarettes, alcohol. I heard some nonsense about applying sales tax or VAT to rent, and having to file for refunds if income is low, seems to defeat the purpose. The people least able to deal with the paperwork, will have more of it than before.
IRS won’t be out of business. (Drat) They will have to grow to keep up with every money transaction in the country (and leaving it.)
It seems there is a lot to be thought out before jumping in with both feet.