Please allow me to clarify a few things. First, the 2009 Plug-In Electric Vehicle Credit is not a tax “loophole” as John described, unless you also consider the $8,000 First-Time Homebuyer Credit offered last year a “loophole.” Second, what I purchased is not a “golf cart” as John described, but a Qualified Plug-in Electric Drive Motor Vehicle, which won’t do you much good on a golf course since there is no place to put your clubs. And third, the vehicle was not “free” as John described, but in fact cost me over $2,000 because I ordered the deluxe 6-seater model with wood-grained paneling and a CD/stereo.
As John was interrogating me for his article, I was honestly shocked when he suggested that some Americans have a moral or ethical obligation to not accept tax deductions that the IRS code offers. Really? If so, could someone please tell me which deductions are acceptable for me to take and which ones are off the table? Are we living in the “Twilight Zone?”
As a candidate for District 4 commissioner, I’m for limited government, free markets and lower taxes. I would never have voted in favor of an electric vehicle tax credit because I think it’s a complete waste of taxpayer dollars. But as a taxpayer who is taxed enough already, I will always avoid, within the law, as much taxes as possible.
If I had to do it over again, would I have purchased an electric vehicle? No. I would have purchased two so that I could have given one to my friend Mr. Boan. And I regret not sending an e-mail to everyone I knew informing them about this ridiculous incentive our genius lawmakers in Washington, D.C., set up to help “stimulate” the economy.
Now that everyone knows I am competent enough to figure out the tax code to find some savings on an electric vehicle, maybe we can get back to the important issues affecting Carroll County.
Jim Watters
Carrollton
In just 4 months, on January 1, 2011, the largest tax hikes in the history of America will take effect.
They will hit families and small businesses in three great waves.
On January 1, 2011, here’s what happens... (read it to the end, so you see all three waves)...
First Wave:
Expiration of 2001 and 2003 Tax Relief
In 2001 and 2003, the GOP Congress enacted several tax cuts for investors, small business owners, and families. These will all expire on January 1, 2011.
Personal income tax rates will rise.
The top income tax rate will rise from 35 to 39.6 percent (this is also the rate at which two-thirds of small business profits are taxed).
The lowest rate will rise from 10 to 15 percent.
All the rates in between will also rise.
Itemized deductions and personal exemptions will again phase out, which has the same mathematical effect as higher marginal tax rates.
The full list of marginal rate hikes is below:
The 10% bracket rises to an expanded 15%
The 25% bracket rises to 28%
The 28% bracket rises to 31%
The 33% bracket rises to 36%
The 35% bracket rises to 39.6%
Higher taxes on marriage and family.
The "marriage penalty" (narrower tax brackets for married couples) will return from the first dollar of income.
The child tax credit will be cut in half from $1000 to $500 per child.
The standard deduction will no longer be doubled for married couples relative to the single level.
The dependent care and adoption tax credits will be cut.
The return of the Death Tax.
This year only, there is no death tax. (It’s a quirk!) For those dying on or after January 1, 2011, there is a 55 percent top death tax rate on estates over $1 million. A person leaving behind two homes, a business, a retirement account, could easily pass along a death tax bill to their loved ones. Think of the farmers who don’t make much money, but their land, which they purchased years ago with after-tax dollars, is now worth a lot of money. Their children will have to sell the farm, which may be their livelihood, just to pay the estate tax if they don’t have the cash sitting around to pay the tax. Think about your own family’s assets. Maybe your family owns real estate, or a business that doesn’t make much money, but the building and equipment are worth $1 million. Upon their death, you can inherit the $1 million business tax free, but if they own a home, stock, cash worth $500K on top of the $1 million business, then you will owe the government $275,000 cash! That’s 55% of the value of the assets over $1 million! Do you have that kind of cash sitting around waiting to pay the estate tax?
Higher tax rates on savers and investors.
The capital gains tax will rise from 15 percent this year to 20 percent in 2011.
The dividends tax will rise from 15 percent this year to 39.6 percent in 2011.
These rates will rise another 3.8 percent in 2013.
Second Wave:
Obamacare
There are over twenty new or higher taxes in Obamacare. Several will first go into effect on January 1, 2011. They include:
The "Medicine Cabinet Tax"
Thanks to Obamacare, Americans will no longer be able to use health savings account (HSA), flexible spending account (FSA), or health reimbursement (HRA) pre-tax dollars to purchase non-prescription, over-the-counter medicines (except insulin).
The "Special Needs Kids Tax"
This provision of Obamacare imposes a cap on flexible spending accounts (FSAs) of $2500 (currently, there is no federal government limit). There is one group of FSA owners for whom this new cap will be particularly cruel and onerous: parents of special needs children.
There are thousands of families with special needs children in the United States , and many of them use FSAs to pay for special needs education.
Tuition rates at one leading school that teaches special needs children in Washington , D.C. ( National Child Research Center ) can easily exceed $14,000 per year.
Under tax rules, FSA dollars can not be used to pay for this type of special needs education.
The HSA (Health Savings Account) Withdrawal Tax Hike.
This provision of Obamacare increases the additional tax on non-medical early withdrawals from an HSA from 10 to 20 percent, disadvantaging them relative to IRAs and other tax-advantaged accounts, which remain at 10 percent.
Third Wave:
The Alternative Minimum Tax (AMT) and Employer Tax Hikes
When Americans prepare to file their tax returns in January of 2011, they'll be in for a nasty surprise-the AMT won't be held harmless, and many tax relief provisions will have expired.
The major items include:
The AMT will ensnare over 28 million families, up from 4 million last year.
According to the Tax Policy Center , Congress' failure to index the AMT will lead to an explosion of AMT taxpaying families-rising from 4 million last year to 28.5 million. These families will have to calculate their tax burdens twice, and pay taxes at the higher level. The AMT was created in 1969 to ensnare a handful of taxpayers.
Small business expensing will be slashed and 50% expensing will disappear.
Small businesses can normally expense (rather than slowly-deduct, or "depreciate") equipment purchases up to $250,000.
This will be cut all the way down to $25,000. Larger businesses can currently expense half of their purchases of equipment.
In January of 2011, all of it will have to be "depreciated."
Taxes will be raised on all types of businesses.
There are literally scores of tax hikes on business that will take place. The biggest is the loss of the "research and experimentation tax credit," but there are many, many others. Combining high marginal tax rates with the loss of this tax relief will cost jobs.
Tax Benefits for Education and Teaching Reduced.
The deduction for tuition and fees will not be available.
Tax credits for education will be limited.
Teachers will no longer be able to deduct classroom expenses.
Coverdell Education Savings Accounts will be cut.
Employer-provided educational assistance is curtailed.
The student loan interest deduction will be disallowed for hundreds of thousands of families.
Charitable Contributions from IRAs no longer allowed.
Under current law, a retired person with an IRA can contribute up to $100,000 per year directly to a charity from their IRA.
This contribution also counts toward an annual "required minimum distribution." This ability will no longer be there.
And worse yet?
Now, your insurance will be INCOME on your W2's!
One of the surprises we'll find come next year, is what follows - - a little "surprise" that 99% of us had no idea was included in the "new and improved" healthcare legislation . . . the members of congress who backed the administration on this point will be astonished!
Starting in 2011, (next year folks), your W-2 tax form sent by your employer will be increased to show the value of whatever health insurance you are given by the company. It does not matter if that's a private concern or governmental body of some sort.
If you're retired? So what... your gross will go up by the amount of insurance you get.
You will be required to pay taxes on a large sum of money that you have never seen. Take your tax form you just finished and see what $15,000 or $20,000 additional gross does to your tax debt. That's what you'll pay next year.
For many, it also puts you into a new higher bracket so it's even worse.
This is how the government is going to buy insurance for the 15% that don't have insurance and it's only part of the tax increases.
Not believing this??? Here is a research of the summaries.....
On page 25 of 29: TITLE IX REVENUE PROVISIONS- SUBTITLE A: REVENUE OFFSET PROVISIONS-(sec. 9001, as modified by sec. 10901) Sec.9002 "requires employers to include in the W-2 form of each employee the aggregate cost of applicable employer sponsored group health coverage that is excludable from the employees gross income."
Lets argue about this!!!
Your true character is showing...too bad no one knows who you really are. That would be a shame to see the person behind all the pointless attacks.
Do you have trouble looking yourself in the mirror?...probably so.
That’s the problem with this country…too many people choose to be cowards and hide rather than stand up to their aggressors.
You can call it “growing a brain” and use an alias but I call it chicken and scared. That I'm not..if one chooses to harm me or my family they will have hell to pay...
FYI, just learned how to read and write a few years ago so I haven't graduated up to the Star News....still in my daily readers. However, I do get tired of it being thrown in my drive way once a month littering up the county.
Maybe one day I can put on my "Big Boy" pants and be just like you......the smartest guy in county politics....NOT!
However, you are absolutely correct....I live in Dist. 5...way to check up on someone. However, I'm a Carroll County citizen and own a business in Dist.4. This entitles me to campaign for whomever I chose without restrictions. I chose Mr. Jim Watters.
The citizens of Carroll County need a commissioner in Dist. 4 that will not march in step with Bill Chappell. Nothing personal against Jon Wilson…this is why Mr. Watters would be the right man for the job.
FYI....spell check is the ticket!
Oh by the way, Bryan, Jim wrote an article in the Star(it was a good article) as well as bought a page to campaign with. If you follow politics in Carroll County then you want to read the Star. Obviously you don't follow politics. You obviously just hear your buddies talking and tend to adopt that mindset. Have you ever pulled the voting record on John Wilson and Chappell(this is the correct spelling, not Chapple)? Look at the facts prior to making your comments. You’re just throwing out a comment you heard a friend make, aren’t you? That is sweet defending your "friend" or "pal", Jim is a big boy who I am sure can defend himself if he deems it necessary.
Shock&Awe...didn't know you wer an English teacher..keep to the issues though. I will do better with my spelling on my next cheerleading post!
I love it!
I will give you credit, you are an awesome cheerleader...not so good with spelling though.
Once again someone brings up Sue Horn and the Bill Chapple newpaper......I give that one a big WHO CARES! Don't they throw that paper in your driveway once a month? The people that read and take seriouly what they print think Bill Chapple is doing a great job. That speaks volumne!
I don't know Mr. Wilson and I'm sure he's a good man; however, always voting with Bill Chapple is not what I want in a Dist. 4 board member. I want somone with that will know every issue, ojectively evaluate the situation, make a sound judgement as whether it benefits the tax payers of Carroll County, and not be afraid of Mr. Bill or what will be printed in the Star News. You are that man...thick skin and everything!
Sue Horn also said in her article that if you were running in Ashley Smith and Kevin Jackson seat that would be a good thing....give me and every other tax payer in the county a break! We need more people like yourself, Ashely, and Kevin on that board to keep Mr. Bill in check!
Stay strong and never waiver....you will be victorious.