Saturday, July 24, 2010

The Tax Foundation has released a tax calculator at www.MyTaxBurden.org, which allows taxpayers to compare their 2011 federal income tax liabilities under three scenarios (methodology here):

All the Bush tax cuts expire completely at the end of this year

All the Bush tax cuts are extended into 2011 or made permanent

President Obama's budget is adopted, which includes a combination of expirations and extensions of the Bush tax cuts.

Below the fold are the Tax Foundation's 13 FAQs on the Bush tax cuts:

1. What are the Bush-era tax cuts, why are they expiring this year, and what is likely to happen?

2. How much did the Bush-era tax cuts cost the Treasury in foregone revenue?

3. Who received the biggest tax savings from the tax cuts?

4. Why were the tax cuts temporary (i.e. not made permanent) when they were passed in 2001 and 2003?

5. What is going on with President Obama's tax cuts, specifically those in the so-called stimulus bill?

6. How does this all interact with the Alternative Minimum Tax (AMT)?

7. What are PEP and Pease, and how were they affected by the tax cuts?

8. Can you provide a complete list of the tax provisions expiring at the end of this year (2010)?

9. What tax provisions expired at the end of 2009 along with the AMT patch, and what are the chances these will once again be extended retroactively?

10. Do you have a chart showing how the various scenarios (tax cuts expiring, tax Cuts extended, and Obama's proposal) would affect key tax parameters like tax rates and brackets, the standard deduction, etc.?

11. What exactly is going on with the federal estate tax right now?

12. How does the recently passed health care bill interact with all this?

13. Can you give me some examples of how families' income tax bills would change as a result of the tax cuts expiring?

https://taxprof.typepad.com/taxprof_blog/2010/07/tax-foundation.html