Congress looked the other way as beneficial tax breaks on the middle class and small business went bye bye at the stroke of 12:01 a.m. 2010:
...some 25 million middle class Americans are now slated to get hit with the alternative minimum tax (AMT) this year. Remember: This is the tax that was originally supposed to only hit the richest 100 Americans....Source: Wall Street Journal - Read the entire article here.
The AMT may now hit tax filers who are school teachers, construction workers and bus drivers. Call them the new rich.
The middle class will get soaked other ways, too. The new homebuyer tax credit goes away. That will hit working families with a $10.8 billion tab. The tax deduction for state and local taxes also disappears, so shoppers of all incomes will cough up $1.85 billion more.
Got a kid in college? The federal tax deduction for college tuition and fees has disappeared. That's another $1.5 billion tax hike on the nonrich....
The 50% write-off for small businesses for capital purchases—such as expanding their facilities, purchasing new equipment or machinery, or building a new plant—has vanished.
But the biggest debacle is the estate tax. On Jan. 1 it fell to zero for the year, and then in 2011 it goes back up to 55%....Sen. Max Baucus has vowed to raise the estate tax back to between 35% and 55% this year, and to make that change retroactive to Jan. 1....
Congress's failure to settle the tax laws for 2010 is an unforgivable dereliction of duty. The federal government isn't so understanding when American citizens are late paying their taxes: The IRS imposes strict civil fines and even criminal penalties. We should hold Congress to the same standards.