What is commonly referred to as the "Bush era tax cuts" are simply the current rate of taxation. They were cuts when they were first introduced in 2003, but they are have not been cuts since that time. Now, on the threshold of a new year and the expiration of those rates, unless there is some kind of agreement, everyone's taxes will be going up.
According to a report put out by the Heritage Foundation in June:
On January 1, 2013, a $494 billion wave of tax hikes will take effect, hitting every American household, regardless of income.
So far several proposals have failed miserably, including the latest "Plan B" put forth by Speaker of the House John Boehner, which sought to raise taxes for all those making more than $1 million.
According to the Director of the Center for Data Analysis at The Heritage Foundation William W. Beach, in a report titled The Cost of Taxmageddon: Impact by State and Congressional District, he breaks down the new taxes on citizens in each state and congressional district.
It should come as no surprise that California will get hit the hardest with increased taxes of nearly $62 billion next year!
The report broke down the tax increases into five groups: Families, Baby Boomers, Low-Income Workers, Millennials, and Retirees. Here's how things pan out:
Families, Average Income $70,662: $4,138 tax increase.
Baby Boomers, Average Income $95,099: $4,223 tax increase
Low Income Workers, Average Income $24,757: $1,207 tax increase
Millennials, Average Income $23,917: $1,099 tax increase
Retirees, Average Income $42,553: $857 tax increase
Note that these income figures are Adjusted Gross Income (AGI). Number of filers and AGI are estimates for 2013. Take a look at the full details here.
Interestingly enough, liberals say this is a bad thing, but for them it would simply be returning to the Clinton Era Tax rates, right? Aren't they the ones who have been saying those were the "happy days" of strong economic growth, prosperity and surpluses? Unfortunately, only the liberals in power will be happy. Those that follow them are in for a rude awakening.
This combined with massive spending is sure to be a huge problem as the country faces the new year.