Tax cuts enacted under former President George W. Bush are scheduled to expire at the end of the year, affecting taxpayers at every income level.
President Barack Obama proposes to permanently extend them for individuals making less than $200,000 a year and families making less than $250,000 — at a cost of about $2.5 trillion during the next decade.
Obama has been plainspoken in his view that the wealthy should pay more in taxes.
Business Insider lists 10 ways the rich will get socked.
• Bush era tax cuts will expire next year for couples earning more than $250,000. The top tax rate will rise to 39.6 percent from 35 percent currently.
• The estate tax, zero this year, returns next year with a top rate of 55 percent.
• Long-term capital gains taxes are likely to rise to 20 percent from 15 percent currently.
• Stock dividends will be taxed as normal income, wiping away the current 15 percent rate.
• Itemized deductions, including charitable deductions, may be limited to 28 percent for couples earning more than $250,000.
• Those same couples will see a 62 percent increase in their Medicare taxes.
• They will face a 3.8 percent surtax on their investment income.
• Flexible spending accounts for medical expenses will be limited to $2,500 from $5,000-unlimited currently.
• The amount of certain medical expenses that can be deducted will drop to 90 percent from 92.5 percent now.
• Insurers will have to pay a 40 percent surtax on insurance plans that top $10,200. That cost will undoubtedly be passed on to the insured.
The pain soon may spread to the middle class.
House Majority Leader Steny Hoyer last month said that tax increases will eventually be necessary to address the nation's mounting debt, raising a difficult election-year issue as Democrats fight to retain control of Congress.
In the near term, Hoyer raised the possibility that Congress will only temporarily extend middle-class tax cuts set to expire at the end of the year. He pointedly suggested that making them permanent would be too costly, the Associated Press reported.
Meanwhile, the government should extend the Bush tax cuts to put money to work and help share prices, Dennis Gartman, founder of The Gartman Letter, told CNBC.
“An extension of the Bush tax cuts would be phenomenally bullish,” Gartman said.
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