US Tax: Federal Taxes Could Go Up For Everyone
PITTSBURGH -- With unemployment still high and so many working families struggling to make ends meet, a federal tax increase is the last thing people want.
A major tax increase on Jan. 1, 2011, will happen if Congress does nothing and that fact comes as a surprise to many.
"I can't believe they're even thinking about it," Donna Carter, of the West End, said. "I didn't even know they were trying to do that."
If the Bush-era tax cuts come to an end, taxes will go up for everyone from poor to the rich. Every income tax bracket goes up.
- 10 percent income bracket goes up to 15 percent
- 35 percent income bracket goes up to 39.6 percent
- Child tax credit drops from $1,000 to $500
- Capital gains tax rate goes up from 15 percent to 20 percent
- Marriage penalty would be restored
"More money out of our pockets," John Ott, from Beaver Falls, said. "We work hard for that money. [We] want to keep some of it."
President Barack Obama and the Democratic-controlled Congress want to extend most of the Bush tax cuts, but it's already a campaign issue for Republicans like Senate candidate Pat Toomey.
Toomey spoke about the cuts with KDKA's Jon Delano.
"They've made this promise many times, Jon, but they have broken it already with huge tax increases," he said. "I have no confidence that they won't break it again."
But Democrats say Republicans want tax breaks for the wealthy, a point made by Democratic Senate candidate Joe Sestak.
"I want to focus and make sure that gets through is the tax cuts that helps the middle class, the working families and those that want to work," he said. "He'll favor the millionaires, Wall Street, and the big corporations."
President Obama says he wants to extend most of the Bush tax cuts, but not those that affect people who make over $250,000 a year.
Some in Congress want to make the tax cuts permanent, but others say they should just be extended for another year or two.
If Congress does nothing, taxes will go up Jan. 1.
Members of Congress are home this week. If you feel strongly, one way or the other, let them know.