Taxes 2000 versus 2008

[OAG]

I am not sure what will happen with the Income Tax system in the USA but I have heard that the plan may entail letting the "Bush Tax Cuts" expire in 2010, i.e., do nothing with the tax system between now and then. If that is what happens I became curious what that would mean to me. So I took a look and compared 2008 taxes (since I know what they will be) to what they would have been using the 2000 rate schedule. Personally, my taxes would have been 24% more under the 2000 rates than they are under the current 2008 rates. Basically, I know the 10% rate goes away and the long term dividend rate goes up (however, dividends do not apply to my situation, just a clean, standard deduction return). Here is the 2000 rate schedule if anyone else is interested (it is a PDF file): http://www.unclefed.com/IRS-Forms/taxtables/2000_i1040trs.pdf

 

[kaneohe]

Don't know how much difference it would make but there probably would be adjustments to the breakpoints in the rate schedules and std deductions/exemptions as there normally is year to year?

 

[Gone4Good]

A couple of things . . .

1) Tax brackets are indexed to inflation so the 2000 schedule overstates how much taxes would be due in 2008

2) No one ever argued for letting the entire tax cut expire. The desire was to roll back the top marginal rates.

3) There is much talk about accelerating a "middle class" tax cut to help stimulate the economy.

4) All talk is just talk at the moment. It's premature to calculate what may, or may not be owed until we actually see a tax plan that has a real shot of passing . . . I wouldn't consider just letting the Bush tax cuts expire to be very realistic.

5) Taxes are going up, eventually. It's just a question of when and by how much.