“Regardless of whether or not you feel taxes need to be raised, a big set of tax hikes is scheduled to happen. To be sure, some of those hikes will be undone in compromises, but many if not most will sneak through.” [Let me explain.]  >Michael “Mish” Shedlock< (http://globaleconomicanalysis.blogspot.com) Words: 425

Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Shedlock goes on to say in edited excerpts from his original article*:

Mike Brownfield said in an article** entitled What Tax Day Could Feel Like in 2013: 

The Tax Foundation reports that because of higher federal income and corporate tax collections, Tax Freedom Day came four days later this year than last. And the bad news is that unless Washington takes action, it will take working Americans 11 more days to meet next year’s tax burden.

That’s all due to Taxmageddon — a slew of expiring tax cuts and new tax increases that will hit Americans on January 1, 2013, amounting to a $494 billion tax hike. Heritage’s Curtis Dubay reports that American households can expect to face an average tax increase of $3,800 and that 70 percent of Taxmageddon’s impact will fall directly on low-income and middle-income families, leaving them with $346 billion less to spend.

Taxes Will Go Through the Roof

Rick Matthews reports in an article*** entitled When the Payroll Tax Holiday Ends in 2013, Taxes Will Go Through the Roof

Without significant tax code changes, in 2013, America is scheduled to get hit with what would be the largest tax increase in our history.

Not only will the $1,000 per year tax holiday for a $50,000 income household disappear, come 2013 all Americans will see the tax on their first $8,700 of income jump from a 10% rate to 15% rate.

That hike will cost the majority of filers an additional $435.

For those eligible for child care tax credits that deduction will drop from $1,000 to $500. The marriage penalty will roar back into effect. The AMT, alternative minimum tax, will finally kick in.

Roll those changes up and a family filing as married with two children making $50,000, will see their taxes increase by basically $2,700

Who is to blame for Taxmageddon?

Republican are to blame. They accepted this silly deal instead of a far better one that Obama would actually have signed….Republicans insisted on no tax hikes at all in 2012, putting everything off until after the election, believing Romney would win in a cake-walk.

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However, if President Obama wins, certainly not at all an unlikely possibility, he is going to drive a much harder bargain this go around.

Conclusion

Regardless of tax consequences, the U.S. is headed for recession, if not already in one. 2013 rates to be a disaster regardless who wins.

• *http://globaleconomicanalysis.blogspot.ca/2012/06/12-reasons-us-recession-has-arrived-or.html
• **http://blog.heritage.org/2012/04/17/morning-bell-what-tax-day-could-feel-like-in-2013/
• ***http://www.policymic.com/articles/4451/when-the-payroll-tax-holiday-ends-in-2013-taxes-will-go-through-the-roof

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Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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