Tags: Heritage | Warning | Taxmageddon | economy

Heritage Sounds Warning on Coming ‘Taxmageddon’

Friday, 11 May 2012 10:39 AM

On Friday, the respected Heritage Foundation, a think tank headquartered in Washington, D.C., warned again of the dire consequences of the largest tax hike in history that is due to strike the United States on Jan. 1, 2013.

The so-called “Taxmageddon” is poised to dump $494 billion in higher taxes on the nation in the first year.

Heritage cites Mohammed El-Erian, CEO of Pimco, the world’s largest bond trading firm who opines that even the rumor of political inaction to forestall the coming tsunami can be disastrous.

Editor's Note: The Final Turning Predicted for America. See Proof.

El-Erian argues a “prolonged political inaction is likely to postpone building plants and purchasing equipment and to discourage them from hiring.”

Meanwhile, Fed Chairman Ben Bernanke warned Senate Democrats on Thursday that the country is headed toward a “fiscal cliff” and that Congress absolutely must deal with the impending tax nightmare.

According to the Heritage report, House Speaker John Boehner, R-Ohio, has heeded the warnings, announcing that his chamber will indeed take up the issue before the November election.

Boehner warned that if Congress does not take action soon, “We’re going to have this mess all stacked up until after the election. And you want to talk about a train wreck? You’re talking about a big one.”

The tax hikes come from a series of expiring tax cuts and the imposition of even more new taxes. Heritage’s J.D. Foster writes that Americans can expect to see the following tax consequences starting next year:

• Income tax rates shoot up,

•The child credit is cut in half,

• The marriage penalty roars back,

•The capital gains tax rate goes up,

•The dividend tax rate soars,

• The payroll tax rate jumps two percentage points,

• The death tax is restored to its punitive past,

• The Alternative Minimum Tax relief expires, and

• A uniquely pernicious additional payroll tax hike from Obamacare takes effect.

If Congress doesn’t act, Foster says, “The effects on families and businesses would be devastating; the effects on the economy no less so. Congress should make current tax policy permanent and eliminate, once and for all, this cavalcade of tax hikes.”

Editor's Note:
The Final Turning Predicted for America. See Proof.

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