Clear Fog Blog

Political musings from Warren E. Peterson

Taxes Going Up, January 1, 2011

Posted by Warren Peterson on September 4, 2010

It’s inevitable; your Federal taxes are going up in 2011. It’s not just the failure of Congress to extend the Bush tax cuts but also the first wave of Obamacare. Even if Republicans win the House and Senate in November, Democrats will still hold the majority until the new Congress starts in January 3, 2011. The new Congress can pass all the legislation it wants (extend Bush tax cuts, repeal Obamacare) but the President still holds the veto pen. Deadlock or compromise will result. If deadlock, your taxes revert to the higher rates in effect from the Clinton years plus new taxes for Obamacare, if compromise, your taxes will go up a lesser amount but still up. This will pose a conundrum for the “I will never, ever vote to raise your taxes!” candidates.

The best one can hope for is a strong Republican majority in the next Congress to provide negotiating power with Obama and hold the line until November 2011 when the American people can add “change” to “hope”.

Thanks to DV for alerting me to the below site which summaries the what’s coming January 1, 2011. Best to be seated before reading.

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