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The Willis Report

What Happens if Congress Doesn’t Extend Tax Cuts

Today is Dec. 1 and with that day comes good news and bad news. Let's start with the good: only 24 days until Christmas!

And next month the Republicans officially take over the house.

The bad news: that takeover doesn't come in time to prevent the largest tax hike in American history set to take effect in 30 days!

So as yet another presidential commission works to reach a compromise on the Bush tax cuts - or as one of our viewers called them last night - Obama tax increases, we wanted to remind you what's at stake if this do-nothing Congress... well... does nothing!

Currently income tax rates for the two highest brackets are 33% and 35%. That would change to 38 and 41%.

What does that mean in dollars? According to the Wall Street Journal, a family making between $ 40,000 and $75,000 will pay around $2,000 more a year in taxes starting in January!

And it's not just income taxes,  right now capital gains and dividend tax rates are 15%. Capital gains would rise to 20% and dividend rates to nearly 40%.

New York Democratic Senator Chuck Schumer says he has a solution: Only raise taxes on those making a million dollars - instead of making the cut-off point $250,000 as President Obama has proposed.

But that would still hurt some small business owners. The Tax Foundation says of the millionaire tax filers - more than 60% of their income comes from business—that’s about two of every three dollars!

Plus millionaires, often accused of skirting the system by finding tax havens and other loopholes, actually pay more taxes when rates are lower.

It's not like we're not taxed enough already - our corporate tax rate is 15% above the international average. So why are Democrats insisting on making things worse!

Many of you won't have a job when these 30 days are up - thanks to the American people - but why should we have to suffer??

Don't let the door hit you... well you know the rest...

 

Be sure to catch the Willis Report on the FOX Business Network every weekday from 5-6pm ET.

 

Gerri Willis joined Fox Business Network (FBN) in March of 2010. Willis is an anchor and personal finance reporter for the network.

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