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The people have spoken and the end is drawing near. The people are all of us who exercised our right to vote earlier this month and the end is the end of the tax cuts passed in 2001.
And Income Taxes are just the beginning:
We have all been enjoying a federal capital gain rate of 15%. This will go up to 20%.
Dividends have been being taxed at a flat 15% for years now. In January, dividends will be taxed at earned income rates (see chart above).
The federal estate tax has been absent this year. It returns in 2011 with a $1 million exemption amount per person and a 55% maximum rate.
What will Washington do? Who knows. Maybe nothing, maybe something. My first concern is today in November 15. With a lame duck Congress, Thanksgiving recess and holiday celebrations on the horizon, how much time is there to do something thoughtful and good? Tax policy effects everyone and everything. Its great if you pay less, but the fact is that our government needs money to run, and if it's not coming out of your pocket, it's probably coming out of your other pocket.
Time.com has "The Coming Tax Cut Showdown". Quick summary - everybody wants tax cuts, but they just can't agree who and how. My fear, the status quo will continue, not because it is good tax policy, but because each side can point to the other and say "I wanted to do something, but he didn't". Any takers on our elected representatives as a whole stepping outside of politics to just get it done?
Deirdre R. Wheatley-Liss is a shareholder of the Law Firm of Fein, Such, Kahn & Shepard, P.C., with offices in Parsippany and Toms River, New Jersey. She concentrates her practice in the areas of Elder Law, Estate Planning and Administration, Business Planning and Tax Law. Deirdre's individual clients range from their 20's to their 80's and beyond, while her business clients range from start-ups with exciting new ideas to 100+ year old business ventures. Clients seek Deirdre's advice and assistance with a variety of planning issues relating to identifying and meeting their personal, family and business goals, whether in a planning or crises situation.
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