Raising any taxes on anyone in a recession is not advisable. But will federal taxes go up in January? Congress will have to decide very soon.
Congress enacted needed tax cuts in 2001 and 2003 – but those tax cuts are due to expire in January unless Congress extends them.
Republicans on the House Ways and Means Committee claim that “Democrats in Washington are now plotting the largest tax increase in history” by letting the tax cuts expire.
President Barack Obama and Democrat congressional leaders want to let taxes increase for individuals with incomes over $200,000 and married couples earning more than $250,000. That would affect many small businesses. Nearly 750,000 taxpayers who report business income would face higher taxes, according to the Joint Commission on Taxation.
Critics say making all current tax cuts permanent would add $3.9 trillion to the national debt over a decade. President Obama says that by raising high-bracket taxes, debt would increase “only” a little over $3 trillion.
Few in Congress want to face the obvious: The government is spending money it doesn’t have. Some of the spending is for unconstitutional things, and some is for desirable but economically unsound things.
Making big, difficult tax decisions – or dodging them – will have very large effects on all of us.
The still-unanswered question is, are we really taxing too little – or are we spending too much?