Tax day may be over, but it is never too soon to start thinking about filing for next year. In fact, several politicians, including former president George W. Bush, have already started.
Bush expressed that he regrets the tax cuts from early 2000 hold his name, during the George W. Bush Presidential Center conference on “Tax Policies For 4% Growth” at the New York Historical Society. Forbes Magazine quoted him alluding to the fact that his name on the tax cut was one of the reasons the taxes would be raised.
“If they were called somebody else’s tax cuts,” he said, “they’d probably be less likely to be raised.”
All of this excitement for the 2012 return is due to the so-called Bush tax cuts. In 2001 and 2003, two different acts were passed in order to revise the tax code. Generally, these new guidelines reduced tax rates for many Americans in the years following. Although the cuts expired at the end of 2010, President Barack Obama approved a two-year extension in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
But by the end of this year, that two-year extension ends. So what will the new year bring tax-wise? It depends on which tax act will be in place, which will be determined largely by the man in the White House come January. Be prepared, as this year’s presidential race will be consumed with tax code debates.
Currently, Obama has a new proposed tax on millionaires called the “Buffet Rule.” Based on one of the most successful investors in the world, Warren Buffet, this new tax rule plans on asking millionaires to pay a 30 percent tax on all of their income, which is supposedly the same income tax rate the American middle-class family pay.
Many have speculated that this new tax plan by Obama has come at a convenient time, 2012 being an election year, and what would the majority of Americans like better than to hear about the “rich” having a higher tax rate?
CNN issued an article adapted from the book, “The Debt Bomb: A Bold Plan to Stop Washington from Bankrupting America.” Author Tom Coburn, a Republican U.S. senator from Oklahoma, discusses how the tax code has entirely strayed from its initial purpose. The article states, “Instead of viewing the tax code as a way to raise revenue and enable government to perform its essential functions, politicians on both sides of the aisle use the tax code — and the debate about taxes — as tools to keep themselves in power and to reward their friends and interest groups who put them there.”
Mitt Romney, the GOP presidential candidate for 2012, has also began to discuss the current tax code. According to the the information found at the Tax Policy Center, an organization founded by the Urban Institute and the Brookings Institute, Romney’s plan will offer a tax cut to the top 20 percent of Americans while increasing the federal tax rate 1.3 percent on the bottom 20 percent.