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White House officials insist that they're confident that a deal will be struck. One top Obama adviser, however, told ABC News that if the House GOP refuses to cut a deal with the president that includes some tax increases on the wealthy, the tax cuts will expire.
Democrats will put forward a bill to restore middle class tax cuts as soon as Congress convenes, and calling on them to pressure Republican congressional leaders to stop holding those tax cuts hostage in exchange for tax cuts for wealthier Americans.
Originally posted by ararisq
Regardless of what the Republicans to do they'll be blamed for everything in 2 years and there will be a lot of blame to go around.
Lower Rates Will Disappear
Currently, all Americans enjoy the lower tax rates the Bush tax cuts provided. If the cuts expire, income tax rates will rise across all tax brackets. Under current rates, those in the lowest bracket pay taxes at a 10 percent rate while those in the top income bracket pay at a 35 percent rate. These rates will rise to 15 percent and 39.6 percent, respectively.
If the cuts expire, the lowest tax bracket will disappear and the lowest tax rate will become 15 percent. The tax rates for middle-income earners will increase from 25, 28 and 33 percent to 28, 31 and 36 percent, respectively.
Other tax rates will also increase. The employee payroll tax rate will increase two percentage points to 6.2 percent. Likewise, the estate tax rate will also increase from 35 percent to 55 percent, while the value of estate assets excluded from estate taxes drops from $5.12 million to $1 million. Lastly, the tax rate on income from realized capital gains will increase from 15 percent to 20 percent.
How Expiration of the Bush Tax Cuts Will Affect Individuals and Businesses