How Republicans Plan to Avoid Taxmageddon

With the possibility of “Taxmageddon” looming over United State’s taxpayers, House Republicans are trying to get a head start in overhauling the tax code. If Congress fails to act before December 31^st, 2012, the Bush era tax cuts are scheduled to expire. This would cause a slew of tax increases on Americans. Taxes will be raised on investment income, estates and gifts, and earnings at all levels. The marriage penalty for joint filers will return, the child credit will drop $500, and the rate everyone pays on the first $8,700 of wages will jump to 15%.  The Social Security payroll tax that Congress voted on in February will expire, and the new Medicare taxes that are a part of Obamacare will be imposed upon anyone who makes more than $200,000. All of these taxes could potentially take away $500 billion out of the economy in 2013 and are set to occur after the November 6^th election.

All of this is sure to occur next year, but not if Republicans have anything to do with it. Rep. Dave Camp (R-MI), the chairman of the Ways and Means Committee, says he plans to overhaul the tax system when the new Congress starts in January 2013. His plan would give lawmakers no more than one year to give the biggest rewrite of the tax code since President Reagan signed the tax reform act of 1986.

This tax overhaul would be a major win for small business as it seeks to combine individual and corporate taxes since small business owners pay their business taxes through their personal income tax. It is likely that this plan would include some kind of competitive corporate tax rate.

Camp hopes that the House will pass a temporary extension of the Bush-era tax cuts in conjunction with a plan that would lay out an “expedited” process for next year’s overhaul. This process would likely involve an up or down vote in the House and Senate. As the Wall Street Journal points out, this plan is not guaranteed to pass through Harry Reid’s do-nothing Senate. Hey, Republicans should be used to getting their responsible plans being cut off by Senate Democrats. Voters should keep this in mind when picking their representatives in November. If the Democrats keep control, you can expect to send more money to Uncle Sam as President Obama and the Democrats have vowed to raise taxes. Props to Camp and his fellow Republicans for going against the Washington grain and getting ahead of a serious issue facing our nation.

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