The Forgotten Tax Increase

Laurence Vance reports:

The only good thing we can say about taxes going into 2016 is that at least they are not going up this year. Such was not the case in 2013, 1991, 1993—and especially 1994. In fact, the “Bush tax cuts” notwithstanding, the forgotten tax increase of 1994 is still with us.

Early in 2013, to avert the “fiscal cliff,” the lame duck Congress passed, with the help of 40 Republicans in the Senate and 85 Republicans in the House, the American Taxpayer Relief Act of 2012 (PL 112-240, H.R.8). The six tax brackets (10, 15, 25, 28, 33, and 35%) of the so-called Bush tax cuts (the Economic Growth and Tax Relief Reconciliation Act of 2001 and the Jobs and Growth Tax Relief Reconciliation Act of 2003) that were set to expire at the end of 2010 until they were extended, with modifications, by the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 ((PL 111–312, H.R.4853), were made permanent. However, for those earning over $400,000 a year ($450,000 for married couples), the top marginal tax rate increased to 39.6 percent. Additionally, the estate tax rate increased, the tax rates on long-term capital gains and dividends were raised on higher-income taxpayers, the personal exemption and itemized deduction reductions were reinstated, the temporary payroll tax cut of 2011 and 2012 was not extended, and refundable tax credits were expanded.

An article well worth your time.