Posted By RichC on September 23, 2011
Much of the political debate coming from Washington DC is focused on cutting the deficit, reforming the tax code and generating more revenue for the federal government. Hopefully those who currently pay federal income taxes (only 52%) are going to be given the loudest voice, but that may not be the case now that we’re 14 months away from an election. (click the chart to the right for a larger image)
President Obama has recently been taking stronger stances in his attempt to raise taxes as a way to fund the spending, reduce the borrowing and generate additional revenues. The GOP controlled house has pretty clearly rejected the idea of tax increases particularly in light of the countries unemployment. Most assume that both are posturing to their political base while those who are less political just want something done to create jobs and turn a floundering economy around. For those in business, clarity is even more important in planning and making decisions. Understanding expenses (including the tax burden) is crucial for those thinking/wanting to expand their businesses and hire employees. We can’t afford to wait until 2013?
For now, I thought the chart above simplifies in explaining the “basics” of the federal income tax as it exists if left unchanged. One thing that is perfectly clear … those with the income to invest and hire will pay more in taxes in 2013 if Democrats and Republicans don’t come to some agreement. It is doubtful many investors or small business owners will be expanding or creating jobs before some certainly is decided pertaining to taxes.
If creating jobs is the desired outcome … allowing tax rates to rise in 2013 (or not not clarifying tax rates for the near future) will NOT improve the unemployment picture.