Break down the Bush tax cuts

by on November 9, 2010 at 12:19 am

Will mariners be affected?

Tax Cuts For MarinersMost likely. Let’s examine two important aspects…

Capital Gains/Dividends

Preferable capital gain rates would rise back to 20%. Dividends would be treated as ordinary income. This could mean a 25% swing for some taxpayers.

Tax Brackets

Not only for the wealthy! Even the 10% tax bracket will be raised to 15%.

Marriage Penalty

Back in force. Especially painful will be pretty much 50% cutback on the Alternative Minimum Tax exemption. Individuals with a large amount of State, Real Estate taxes and employee business deductions (aka mariners and tradesmen) will be especially effected.

Easy way to see it

If you paid taxes before – you’ll pay more after. Many individuals do not pay taxes at all. This can be due to a multitude of facts and circumstances. Primarily income.

Hopefully something will be done. A family who was scraping by with the current economy – say 150,000, house, two kids in college (sorry no financial age for you), lot of AMT expenses…. They would be prime candidates. If they had been scraping by, something would have to give to pay the mortgage.

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