Don’t worry Charles Krauthammer.
A VAT is not coming to America, at least not anytime soon.
The Congress just doesn’t have the political will to pass a new tax bill, especially after the brutal healthcare battle.
As for deficits: the Chinese can keep funding those.
But wait, there is one new tax hike: the expiration of the Bush tax cuts. That’s coming in the 2011 budget year.
At its core, the move is merely the highest tax bracket returning to 39.6% from its 35% low and raising the 33% bracket to 36%, according to the Obama administration’s budget.
The estate tax of 45% would also become permanent, with an exemption of $3.5 million.
While these increases appear just to target wealthy Americans, they also hit small businesses.
Says Andrew Moylan of the anti-tax National Taxpayers Union: “According to IRS data, there are nearly 26 million small employers (about 20 million sole proprietor ships and 5.9 million businesses with less than 99 employees) that file under the individual income tax code and pay taxes on the owner’s 1040 form.”
“2/3 of small business profit would be subjected to much higher taxation should the pre-2001 rates become law,” Moylan added.
By the time the new Congress convenes in January 2011, “We could see higher taxes across the board,” said Moylan.
Seeing as small business are expected to be the core of a coming wave of job creation, this tax hike will be particularly brutal. Maybe that’s why, even though the economic headlines are looking good, small business sentiment remains in the dumps.
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