This (shouldn't be) just in - Bush's tax cuts put more money in your pocket! Based on the normal readers of my blog, this is a fairly safe statement to make. These tax cuts expiring will mean you will be paying more money to the federal government. I have said this to many people and people continually had accused me of being far right or fear mongering - but you can read a good in depth article here at Yahoo! Finance courtesy of the Wall Street Journal's SmartMoney. Here are some of the top ways you will be paying more, quotes from the aforementioned article when possible:
1) Higher tax brackets for all. "The current six rate brackets of 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five new brackets with the higher rates of 15%, 28%, 31%, 36% and 39.6%." Your first dollars will be taxed at a higher bracket. You can see the tax brackets here at MoneyChimp. The 10% tax brackets currently covers the first $8375 for singles and $16750 for married filing jointly. Thats immediately another $400 for single and $800 for married couples just for the first tax bracket.
2) Higher capital gains and dividend taxes. "Right now, the maximum federal rate on long-term capital gains and dividends is only 15%. Starting next year, the maximum rate on long-term gains will increase to 20%. The maximum rate on dividends will skyrocket to 39.6%." "Right now, an unbeatable 0% rate applies to long-term gains and dividends collected by folks in lowest two rate brackets of 10% and 15%. Starting next year, those folks will pay 10% on long-term gains and 15% and 28% on dividends (compared with 0% now) unless a change is made. "
3) The end of many more specific fixes to the tax code. The marriage penalty comes back. Itemized deductions and personal exemptions. begin to be phased out again for higher income individuals. You can check out the article for more specifics.
I hope this helps you understand better that we all used to benefit from these tax breaks and losing them will hit all of our wallets. I hope that it doesn't affect YOUR budget too much!