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Bush Tax Cuts Expiring, Could Be Costly For Taxpayers

Posted: August 16, 2012
Bush Tax Cuts Expiring, Could Be Costly For Taxpayers

Bush Tax Cuts Expiring, Could Be Costly For Taxpayers

With Bush tax cuts expiring at the end of the year, taxpayers nationwide could be looking at a bigger chunk missing from their paychecks, and the issue itself looks like it will take center stage in the 2012 presidential race.

The picture of just how much the Bush tax cuts expiring will affect Americans came a bit clearer this week with a state-by-state analysis by the non-profit Tax Foundation.

The Tax Foundation’s analysis shows that the traditionally blue states will be hit hardest by the Bush tax cuts expiring with Connecticut taking the biggest hit. Connecticut residents would pay an average of $5,783 more in taxes next year is the cuts aren’t renewed by President Obama and Congress, the New York Post reported. The next-biggest hit comes in New York, where residents would pay $5,542 more on average.

Though some states see less of an impact from the Bush tax cuts expiring, the overall effect would be great, said Will McBride, an economist with the Tax Foundation.

“It’s pretty dramatic,” he said. “This is the biggest tax increase that would happen since World War II.”

The bigger tax bills would also threaten to erase economic growth, McBride added.

“This sort of domestic policy would immediately impact demand and really shock investors. I would expect the stock market to take a real hit in September if something like this is not passed [to extend the tax cuts],” he said.

President Obama has made the Bush tax cuts expiring an election-year issue, as he and congressional Democrats have vowed to stop the tax cuts for the richest Americans. Obama and Democrats want to keep the tax cuts for the middle class but allow the Bush tax cuts to expire for those in the upper income ranges.

As the Jacksonville Business Journal pointed out, Obama has been pressing the issue during campaign stops in Florida and other swing states. He noted that under Mitt Romney’s economic plan, people who make more than $3 million a year will see their tax bills reduced by $250,000 and asked audiences: Who will pay for the cuts?



Comments


4 Archived Responses to “ Bush Tax Cuts Expiring, Could Be Costly For Taxpayers ”

  1. Olde Rose
    Aug 16, 2012

    There must be some mistake. When these tax cuts were enacted, the Left and the media (but I repeat myself) ranted that only The Rich would benefit. If that was the case, how can their expiration possibly harm anyone except The Rich? Help me, Fonda, help help me Fonda!

  2. Steven Gammon
    Aug 17, 2012

    All these big baby's in congress can't even talk to each other like adults, Im expecting them to go away, again we lose congress 100-taxpayers 0 it time to throw the whole bunch out on there butts!

  3. Anonymous
    Aug 17, 2012

    Normal people will be hit in the wallet..but not as hard as ConocoPhillips Chief Executive James Mulva. He saved almost $6.7 million in federal taxes on his 2011 taxable pay of $145.9 million due to the lower individual rates signed into law by former U.S. President George W. Bush. First off, we taxpayers were kind enough to pay extra money for our gas so important people like Mulva could have an income that let him buy a few odds and ends that are needed to exist.

    So, now Mitt Romney says that he not only wants the Bush tax cuts for the wealthy (mainly) to stay in place, but he will reduce taxes for the rich even further if he's elected. You have to admit, Mitt is such a nice friend for the rich to have…meanwhile, we'll pay even more for our gas as out thanks.

  4. Anonymous
    Aug 18, 2012

    The Bush tax cuts did away w/ the marriage penalty. My husband and I paid $2-3000 each April 15 and were happy to get a small refund after the tax cuts. I don't want to go back to paying more taxes just because I'm married. I also can't afford it. If the marriage penalty returns there will be a high rate of divorce w/ people then living together to avoid taxes.