With Tax Freedom Day Past, Taxmageddon Looms
According to the Tax Foundation (Fiscal Fact No. 297, April 16, 2012), “the roughly $500 billion tax increase scheduled to occur January 1, 2013—could push Tax Freedom Day to the end of April or beyond.” We Growled about Tax Freedom Day yesterday.
Now comes Taxmageddon, which the Tax Foundation described this way:
“Taxmageddon, as Curtis Dubay (author of Heritage Issue Brief 3558, April 4, 2012) and others (Ezra Klein of the Washington Post, March 30, 2012) have described it, is the result of a litany of expiring tax provisions, all occurring at the end of this year. The biggest expiring provisions are the Bush tax cuts, the payroll tax holiday, and the Alternative Minimum Tax (AMT) patch."
Fox News writes about Taxmageddon this way a report today:
“As many Americans were scrambling to get this year's taxes done, analysts were warning about a bigger tax day -- what some call a tax Armageddon, or "Taxmageddon," to characterize its potential effect on the U.S. economy.
“At the end of the year, some $500 billion in tax breaks expire all at once, hitting American households with an average tax increase of $3,800 -- if Congress doesn't act.“The potential increases include $165 billion more from taxpayers as a result of expiration of the Bush-era tax cuts, which would push taxes from a bottom rate of 10 percent and a top rate of 35 percent to a bottom rate of 15 percent and a top rate of 39.6 percent.
"Taxmageddon is a $500 billion, one-year tax hike that hits the economy on Jan. 1, 2013," Curtis Dubay of the Heritage Foundation said.”
The following table is from the Heritage Foundation’s Issue Brief 3558, and lays out the details of the $494 billion in tax increases that is scheduled to slam Americans on January 1, 2013.
Additional resources based on a Google search of “Taxmageddon:” Washington Post, February 18, 2012; David Leonhardt of the New York Times, April 13, 2012 reports Taxmageddon this way, "All in all, the end of 2012 will be unlike any other time in memory for the federal government." At Townhall.com, Larry Kudlow writes:
"In my latest interview with former Governor Mitt Romney, he emphatically defends his own business success against Obama’s class warfare/Buffett Rule/Romney Rule attacks.
"Don’t look for Mitt to back off from his free enterprise vision.
"He also told me he will go after HUD and DOE for budget cuts and consolidation, along with a slew of other agency cuts. He will also roll back tax deductions for upper-earners while he lowers marginal rates by 20 percent across-the-board. He does not want more stimulus from the Fed. Thinks blaming speculators for high energy prices is completely wrong."
Finally, Keith Hansen opines at Brainerd Dispatch that "Taxmageddon lies ahead" for the nation "if we maintain the track we’re on there will be a collapse. Our debt is out of control. Our spending is more than the Internal Revenue takes in and 50 percent of the people in the U.S. do not pay taxes."