The Republican Study Committee, a group of conservatives in the House of Representatives, is out with a report on all the tax increases scheduled to go into effect in 2013 if Congress does not take action.
The one-year employee-share payroll tax cut of 2% will expire.
The marginal income tax rates will increase as follows:
- 35% bracket will increase to 39.6%
- 33% bracket will increase to 36%
- 28% bracket will increase to 31%
- 25% bracket will increase to 28%
- 10% and 15% brackets will condense to 15%
The standard deduction for couples as a percentage of the standard deduction for singles will decrease to 167% from 200%, restoring the marriage penalty.
The personal capital gains tax will increase to 20% and 10% (from 15% and 5%)
Dividends will no longer be taxed at the capital gains rate for individuals.
The "death" tax using the "stepped up" basis will return with a 55% maximum rate (including surtax) and a $1 million exemption, after complete repeal in 2010, and then the 2010 tax compromise's 35% tax rate with a $5 million exemption.
The child tax credit will decrease to $500 from $1,000.
Some of what the Republican Study Committee counts as tax increases is stuff that others might consider tax expenditures. For example, "The tax credit for the production of Indian coal will expire," and "The cellulosic biofuel producer credit will expire."
The lawmakers are either fools for framing these tax laws in a way that creates uncertainty for taxpayers or they are geniuses for creating an election-year issue for themselves. Or they are some combination of fools and geniuses.