Ruestman: Washington Tax Increases Coming

Last week, we reported that the Republican majority in Jefferson City has been able to balance the budget for eight years with no tax increase.  While we have made a solid effort to protect individuals and small businesses, it appears the Federal Government is working just as hard to take money away from you.  Please note: my office received this information from Americans for Tax Reform (www.atr.org) and the Congressional Joint Committee on Taxation (www.jct.gov).

In less than six months, the Democrat majority in Washington will begin the largest tax increases in American history.

The first increase to hit us will be on January 1, 2011.  On that day, the 2001 and 2003 Bush tax cuts will expire.  These tax breaks were passed for investors, small business owners and families.  What does that mean for you?

Personal income taxes will rise.  Itemized deductions and personal exemptions will phase out which has the same effect as higher marginal tax rates.  Here is the full list:

• 10% bracket rises to 15%
• 25% goes up to 28%
• 28% rises to 31%
• 33% increases to 36%
• 35% rises to 39.6%.

It doesn't stop there.  The "marriage penalty", as it is known, will return.  The child tax credit will be cut in half from $1000 to $500.  The standard deduction will no longer be doubled for married couples.  The death tax will reappear.  After January 1, all estates over $1 million will be taxed at 55%.  A person leaving two homes and a retirement account could leave their children owing the government.

Savers and Investors?  Get ready to be punished for good decisions.  The capital gains tax will rise from 15 to 20% next year.  The dividends tax will more than double going from 15 to 39.6%.  It doesn't stop there; they will go up by another 3.8 percent in 2013.

On top of ALL that, the dependent care and adoption tax credits will be cut.

These taxes only further compound the bad economy state legislators are dealing with.  As a state, it is difficult to turn the boat around when the federal government increases the hole in the stern.  Now is the time to make educated decisions at the polls and let your voice be heard in D.C.!

If you have problems, questions or wish to express concern over an issue, please do not hesitate to contact me or my Legislator Assistant, Jonathan, at my Capitol office either by phone 573-751-9801 or by e-mail at Marilyn{dot}Ruestman{at}house{dot}mo{dot}gov.