The second half of this year will see something surprising happen in the businesses world and Wall Street... Companies will start showing a profit where none was expected, and this time, Obama can blame it on Bush.
With the Bush tax cuts expiring on January 1st, 2011, tens of millions of Americans (not just the ones that make over $250k) and thousands of corporations will see their tax situation change for the worse. The Bush tax cut expiration will affect everyone:
* 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%
* 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 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.
* There are over 20 new or higher taxes as a result of Obamacare.
And the main reason for the post:
* 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.”
What this means, from a business perspective, is that corporations will be scrambling this year to reassign, post, and report any and all profit so as to pay at the lower 2010 levels. There will be buybacks, buyouts, depreciation schedule changes, etc., all designed to place any and all forthcoming profit into the 2010 business friendly time-line.
This will eventually place a false sense of "See, Obama's economic plan is working," among the lemmings who don't know any better. I'm sure Obama will waste no time in taking full credit for the increased profit that American companies will be reporting at the end of the year. Wall Street may see a bit of a jump as well when uninformed investors begin to pile on the profit bandwagon a day late and a dollar short (literally). Now, if your smart, you'll get in now with some handsome Mar - May 2011 call options on your favorite fortune 500 so you can sell them to unsuspecting dupes later this year when the inflated quarterly and yearly numbers are reported (for companies who adhere to a traditional calendar fiscal year).
You will need the cash, because eventually the reality of the situation will set in and people (including "government experts") will begin to see that the companies they thought were soaring are starting to report losses or see mediocre, if any, profits on the horizon. This will lead to a second and more serious recession than our previous one. I'm sure the State controlled media will turn this into another poster boy for Obama's Wall Street takeover attempts, stating that the evil that powers free enterprise is responsible for this latest fiasco and the only way to guarantee it remains fair is to put it in government hands.
So, for all you lib's out there, let me ask you this... What happened to Obama's pledge that no one making under $250k / yr would see a tax increase? And don't throw out that BS about how these are Bush's cuts which he made sure would expire under someone else's watch! Mmmm, no! Our teleprompter in chief could easily extend them, he simply chooses not to.
BTW: I posted a copy of all of the tax increases you fine upstanding citizens will be paying in 2011 and beyond. You can find it here!