POSTED BY JHW22
I received an email from someone just showing me what's going around -- no one is stupid enough to send me this crap as if it's true -- and I made that person PROMISE to send my response to the woman who sent the email. Here is my response, followed by the text of the email. All of my comments are in italics and blue.
When I see emails like this I have three options. I can ignore them. I can pass them on without checking any of the information within. I can reply with facts. As a responsible citizen who cares about this country I choose option 3. It's intolerable that emails like this circulate without people taking the time to check data, facts, original sources and so on. It's bad for the country that people so willingly believe/trust, an email written by a stranger that's been passed on so many times you don't even know anyone who knows anyone who knows the person that wrote it.
So I started addressing each of these one by one (all of my comments are in blue in the original email below). It took me a LONG time. It takes hard work figuring out where the initial claim originates so as to verify the facts. And once that initial claim is somewhat located in some sense of reality, it takes true effort to articulate and cite sources to show where the original email is 100% wrong or has the facts so twisted that it may as well be 100% wrong. So no wonder people add a little sentence of fear and hit send. It's so much easier to do that than to actually seek the truth.
But I got worn out from debunking this stuff. I spent HOURS doing the right thing of finding information. And it occurred to me: why? People who pass these emails around don't want truth. They want to pass on crap as truth because it makes them feel angry and they want others to join them in their anger. And I joined in that anger. But my anger is not at the lies in the email, but at those who pass them on to their friends and family. My anger is at the people who act like they love America as they divide it into those who want to be afraid over lies and those who want to find out the truth.
We just went through eight years where a President said he was a fiscal conservative while creating the very tax cuts that were known to have been bad for the deficit. And now the same party wants to pretend that the effects of those tax cuts weren't so bad and want to blame Democrats for saying they only want to extend the cuts to the middle class. We had an administration who lied about WMD's, thus throwing us into a lie-based war that further added to the deficit. So why, why on Earth, do we allow the people who supported those policies continue to spread lies and manipulate facts to the point of pathetic emails that don't cite sources, leave key sentences out of quoted paragraphs and make sweeping generalizations about fractions of an issue while ignoring the overall benefit of the bigger picture, to pass on lies without a fight?
So even though I ran out of steam and didn't address each issue in this email, I can proudly say that I tried. I did the work. I spent the time finding the truth. Perhaps the people who pass these emails on will take the time to do a reasonable and honest amount of research on their own (and Googling phrases doesn't count because with emails like this, you'll see it plastered all over the internet and the same text repeated 5,000 times is still the same text and not 5,000 supporting documents). But I have a feeling that no one else will take the personal responsibility of researching because perhaps they are afraid they will find out that emails lie. That people who start them have an agenda. That people who just forward them would rather believe an unreliable email than actually take part in the civic duty of being properly informed.
Here is what the President said today (it says a lot about his agenda, the state of the Republican party and the people who would rather read an email and believe it, than find out what's really happening in America): "And there’s currently a jobs bill before Congress that would do two big things for small business owners: cut more taxes and make available more loans. It would help them get the credit they need, and eliminate capital gains taxes on key investments so they have more incentive to invest right now. And it would accelerate $55 billion of tax relief to encourage American businesses, small and large, to expand their investments over the next 14 months.
Unfortunately, this bill has been languishing in the Senate for months, held up by a partisan minority that won’t even allow it to go to a vote. That makes no sense. This bill is fully paid for. It won’t add to the deficit. And there is no reason to block it besides pure partisan politics."
I hope that this email will be shared as a reminder that our Founding Fathers didn't take the easy route. They didn't copy and paste or pass on someone else's fact as theirs. No. They were the elite of the elite. They were intelligent and serious and had more integrity in their discourse. They believed in doing the hard work of thinking and writing at levels Americans can't comprehend today. In honor of them, I implore people to DO THE WORK. READ. LEARN. And for Pete's sake, don't just hit send!
Jennifer
ORIGINAL EMAIL ADDRESSES DELETED TO PROTECT THE INNOCENT AND THE STUPID
Just want ALL to be informed………………………CHANGES are coming very sooooooon.
In just six months, 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:
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:
First of all, these taxes, which are set to expire were designed to expire because they were so bad for the deficit. They used the dreaded reconciliation process to get votes on the tax cuts but because of reconciliation rules, the cuts had to expire after ten years unless renewed. President Obama has said that he will ONLY ALLOW the cuts to expire for the top 2% of income earners. Therefore all those expiration listed are as Republicans drafted but NOT how President Obama has said (while campaigning and as President) he will allow it to work. IF he allowed the entire set of taxes to expire, the first part of this ridiculous email would be true. HOWEVER, President Obama has committed to extend the tax cuts for those making less than $200k. This email is disingenuous to say the least. In fact, Obama wants to make the cuts PERMANENT for 95% of Americans.
Here is a link that is far more honest than this email as to the tax cuts. And the guy isn't an Obama lover.
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, there is no death tax. 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 and a retirement account could easily pass along a death tax bill to their loved ones.
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:
Since I think links are important, here is a link to the health care bill as finalized as well as a summary provided by the Kaiser Family Foundation.
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).
FSA won't cover OTC meds NOT prescribed by a doctor. They never should have. I think it's funny that we don't want big government but people want to take a tax credit for buying pain reliever or allergy medicine. The abundance of OTC meds that are store brand or so cheap to produce that they cost pennies means that you would have to buy a boat load of vitamins and aspirin to even make a dent in a dent in a dent in the FSA. What this email doesn't point out is that anything like Claritin OTC which does cost more than the average OTC can actually meet the FSA requirements because you CAN have a doctor write a prescription for it. You CAN have a doctor write a prescription for aspirin. I wish everyone on this email chain would calculate how much they actually spend on OTC meds and then calculate how much of a tax savings they get now for paying for it out of an FSA. They'd be shocked at the fraction of a dent this makes in their lives -- especially if they have doctor's orders to use it.
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 be used to pay for this type of special needs education.
The FSA was changed to include a limit in part because of the small number of people who actually utilize it or maximize the dollars they withhold. What this email fails to mention is that companies have historically set limits on their own even though the fed govt didn't require them to do so. This email makes it appear as if all families could withhold $14,000 when the actual average is $5,000. By the way, as of 2009, "Health care flexible spending accounts are offered by 27 percent of all employers but 85 percent of those with 500 or more employees. The average employee contribution is $1,424, well below the $2,500 cap that has been suggested in health reform proposals." Also, families won't be able to put the same amount in the FSAs HOWEVER they will be able to take a deduction on the money spent as childcare and medical expenses. So they may not get to use pre-tax dollars to pay for a daycare or special school for special needs kids or doctor's appointments or medication but they will be able to add all of that to their out-of pocket childcare and medical expenses for the year. On that point alone it's a wash in the end. Let's also not forget that a lot of special needs kids don't have health insurance or fairly priced insurance. The ObamacaresAboutAmerica Health Care Law will lower premiums and copays and cover preventative care, thus for many families making the FSA cap moot. In fact, the OVERALL health care law will likely end up saving more money for these particular special needs families. Oh, and let's not forget that in his 2011 budget, Obama asked to DOUBLE the child care tax credit for families making less than $85k/year in addition to more funding for child care programs, thus lowering the financial burden on families with children. I guess, if you think about it, the only way to prevent that from happening would be to vote against Obama's budget.
The HSA 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 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 left-leaning 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.
Now let's look at this WHOPPER of a claim. Yes, the "left-leaning Tax Policy Center" said that AMT taxpaying families will rise from 4 million to 28.5 million. They said it in 2007!! They ALSO said, "Two primary culprits are responsible for this impending explosion: the failure to index the AMT for inflation and the 2001–2006 tax cuts." The original email didn't include a link, so I will provide one here. The CBO did say the same thing THIS year: "If current law remains unchanged, the role of the AMT in the tax system will expand rapidly over time. With the expiration of a temporary increase in the AMT’s exemption amounts, the number of taxpayers affected by the AMT will jump from 4 million in calendar year 2009 to 27 million in 2010." They also said, "series of reductions in the regular income tax enacted starting in 2001 would have caused even more returns to be subject to the AMT were it not for the series of temporary adjustments (often called 'patches') that lawmakers made to the alternative tax" -- meaning that we are constantly needing patches. The patches are why emails like this circulate every year scaring people about the AMT because each year the patch from the year before expires.
So let's look at what the "left-leaning" Tax Policy Center said THIS year in regards to the 2010/2011 budget presented by Obama: "The president proposes to make permanent the 2009 AMT parameters—exemptions, rate brackets, and phaseout thresholds—and index them for inflation. That would remove a significant source of uncertainty about taxation and prevent inflation from pushing large numbers of taxpayers onto the AMT in future years. Most of the benefits of the change would go to taxpayers with relatively high incomes: about three-fourths of the tax cut in 2012 would go to households with income over $100,000. Over half of taxpayers with income between $200,000 and $500,000 would see their tax bills drop by an average of over $1,800, raising their after-tax income by more than 0.9 percent." 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 expense half of their purchases of equipment. In January of 2011, all of it will have to be “depreciated.”
It's harder addressing a claim when there is no basis for the claim, no link, law, article, nada. So the best I can figure is this is in reference to the H.R.2847 Hiring Incentives to Restore Employment Act which DOUBLES deductions on property MAKING the deduction up to $250k. This bill DOUBLED the original limit of $125k and is set to expire by 2011. So the claim that "businesses can normally expense" is based on NOW which is a doubling of the "normal" $125k. Here is what the IRS says: "HIRE and Section 179 Deduction
A qualifying taxpayer can choose to treat the cost of certain property as an expense and deduct it in the year the property is placed in service instead of depreciating it over several years. This property is frequently referred to as section 179 property.
The Hiring Incentives to Restore Employment (HIRE) Act of 2010 extends the dates of the IRC Section 179 temporary increase in limitations on expensing of depreciable business assets.
Under HIRE, qualifying businesses can continue to expense up to $250,000 of section 179 property for the 2010 tax year. Without HIRE, the 2010 expensing limit for section 179 property would have been $125,000.
The $250,000 amount provided under the new law is reduced, but not below zero, if the cost of all section 179 property placed in service by the taxpayer during the tax year exceeds $800,000."
Now, let's address the "This will be cut all the way down to $25,000" claim and ask, "WHAT?" Again, this is why claims that have zero back-up documentation are such a pain to address. Where did that dollar amount come from? Can you tell from reading that paragraph? No. Because the person who wrote it wants to scared and angry rather than informed. So let's take a stab at it and see if one of these two options makes sense (Both of these potential sources behind that mysterious $25,000 amount are from the IRS's explanation of the Section 179 Deduction on depreciation): 1) "You cannot elect to expense more than $25,000 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax year." ("However, the $25,000 limit does not apply to any vehicle:
Designed to seat more than nine passengers behind the driver's seat,
Equipped with a cargo area (either open or enclosed by a cap) of at least six feet in interior length that is not readily accessible from the passenger compartment, or
That has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield.")
2) "Example. In 2009, you bought and placed in service a $275,000 tractor and a $25,000 circular saw for your business. You elect to deduct $225,000 for the tractor and the entire $25,000 for the saw, a total of $250,000. This is the maximum amount you can deduct. Your $25,000 deduction for the saw completely recovered its cost. Your basis for depreciation is zero. The basis for depreciation of your tractor is $50,000. You figure this by subtracting your $225,000 section 179 deduction for the tractor from the $275,000 cost of the tractor."
"If property you acquire to use in your business is expected to last more than one year, you generally cannot deduct the entire cost as a business expense in the year you acquire it. You must spread the cost over more than one tax year and deduct part of it each year on Form 1040, Schedule C. This method of deducting the cost of business property is called depreciation." That's all. It just means you take the deduction over time -- the time you USE it.
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.
When someone tells you there are "literally scores of tax hikes: shouldn't the "literally" list "scores" and their sources? It is "literally" annoying that they don't. And if you think about it, one definition of "scores" is: A grievance that is harbored and requires satisfaction. Well, I require satisfaction on that claim that I harbor grievance over. Since there is a vague reference to "the loss of ... research and experimentation tax credit" let's see what that could possibly mean. Well, again I will refer to Obama's 2011 budget in which he requested the R&E tax credit be made PERMANENT as well as fund "scores" of R&D opportunities. I guess, if you think about it, the only way to prevent that from happening would be to vote against Obama's budget.
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.
Again, no citations. In a statement about education, you would think the person who wrote this email would do what every teacher told him to do: "Show your work", "list your resources", "support your claims". But nope. The writer of this email scares you while giving you no way to confirm whether the claims are fact or fiction. You could search the internet for days and never prove a negative. But let's give it a shot. Oh, yeah. The writer is making the ASSumption that Obama and Congress are going to allow the Bush tax cuts to expire for ALL Americans. Again, you would have to buy into the myth that Obama is going to allow all of Bush's tax cuts to expire which there is absolutely no support for. None. Obama has said and continues to say that he will extend the Bush tax cuts for those making less that $200k. That's all that this is based on.
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.
PDF Version Read more: http://www.atr.org/six-months-untilbr-largest-tax-hikes-a5171##ixzz0sY8waPq1
Now your insurance is 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 dupes, er, dopes, who backed this administration 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.
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."
Joan Pryde is the senior tax editor for the Kiplinger letters. Go to Kiplingers and read about 13 tax changes that could affect you. Number 3 is what is above.
This is my favorite part because it's big and bold and yellow and WRONG. In regards to the Kiplinger's article the email says to go read, it's funny that the person who wrote the email left out a key sentence from Ms. Pryde's article: "3. A requirement that businesses include the value of the health care benefits they provide to employees on W-2s, beginning with W-2s for 2011. The amount reported is not considered taxable income." That's right: NOT CONSIDERED TAXABLE INCOME!! Why would they leave that out of the email? Because they know most people will NOT go to the article itself. They rely on people being scared and lazy and just passing on an email without digging deeper. This alone should have been the one reason to not counter each myth or distortion but it was fun doing it anyway. Since the original email didn't provide a link, I will.
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