• The Heritage Network
    • Resize:
    • A
    • A
    • A
  • Donate
  • Morning Bell: Happy Tax Year!

    While millions of Americans are more than ready to put 2009 behind them, they should know that Congress failed to reauthorize dozens of tax breaks for individuals and businesses before the Members scurried home for the Holidays. These “expiring provisions” affect every American in one way or another as individuals or businesses. By allowing them to lapse, Congress has enacted tax increases at time when these taxpayers can least afford it.

    The House has passed legislation (H.R. 4213) that would have extended 63 current tax provisions, but the Senate failed to bring this bill to a vote. Thus, all of these provisions expired at midnight last night. Notable provisions as reported today by Tax Notes include:

    • Deduction of state and local general sales taxes (section 164) (Personal Tax Incentives)
    • Additional standard deduction, up to $500 for individuals and $1,000 for couples, for state and local property taxes (section 63) (Personal Tax Incentives)
    • Research tax credit and alternative simplified credit (section 41) (General Business Tax Incentives)
    • New markets tax credit (section 45D) (Community Assistance Provisions)
    • Empowerment zone incentives (sections 1391 and 1202) (Community Assistance Provisions)
    • Renewal community tax incentives (sections 1400E, 1400F, 1400I, and 1400J) (Community Assistance Provisions)
    • District of Columbia Investment Incentives (sections 1400, 1400A, 1400B, and 1400C) (Community Assistance Provisions)
    • Net disaster loss designation and $500 limit per casualty for personal casualty losses attributed to federally declared natural disasters (section 165) (General Disaster Relief Provisions)
    • Expensing for qualified disaster expenses (section 198A) (General Disaster Relief Provisions)
    • Biodiesel and renewable diesel incentives (section 40A) (Energy Incentives)
    • Alternative motor vehicle credit for heavy hybrids (section 30B) (Energy Incentives)

    Although the House has acted and passed its version of the Tax Extenders Act of 2009, the Senate failed to act on similar legislation, as a result the following additional key tax provisions will expire:

    • Increased exemption levels for the individual alternative minimum tax (section 55) and personal tax credits allowed against the AMT (section 26)
    • Exclusion of unemployment compensation benefits from gross income (section 85)
    • Alternative fuel mixture tax credit (section 6426(e))
    • Reduced estimated tax payments for small businesses (section 6654(d)(1)(D))

    The Senate has had a lot on its plate this year. But it is still unacceptable that they have stalled on the chance to extend these tax provisions that affect every American. By allowing these tax provisions to expire, taxes will rise on many individuals and businesses, and for some of these groups, a punitively steep tax hike.

    At the very least, we hope for a New Year’s Resolution from Congress that it acts swiftly in 2010 on passing legislation to amend and extend tax laws that assist every American individual and business which will lead to a stronger, robust economy.

    Even better, would be if Congress reformed the entire tax code and brought us a tax system based on one rate, applied once to all income, and in a form every taxpayer can understand. However, that may be asking too much in one New Year’s Resolution.

    Posted in Ongoing Priorities [slideshow_deploy]

    22 Responses to Morning Bell: Happy Tax Year!

    1. Blair, Franconia, NH says:

      Mark Twain said it. "Two things are certain. Death and taxes."

    2. Whicket Williams Kin says:

      Where is obama's promises not to raise taxes?? why is not everybody who has a voice screaming as loud as possible about this?? When will anybody do anything? the only positive thing I have seen is Dr Donna Campbell in Texas running for doggets seat and Dr Paul, in Tennessee running the rest is same old inaction. Where are the patriots who want to retake America and defend the constitution???

    3. Ron Derry Nh says:

      You write as though they care, or at least had a chance to.

      We in the world of rationality and sanity know that in a few short months we are going to be burdened with paying down the debt that OBAMA manifested, doing it with less worth, doing it while the economy and jobs losses continue to de-valuate us and doing while they steal our country to make it more like a socialist enclave of cronyism and unionized coercion.

      We in the real world know that most Americans WANT salvation by their government and have accepted the exchange from responsibility to socialism's false promises…as they are all too willing to blame Bush, capitalism and the war for our debt and current situation and not CONGRESSES 40 year quest to socialize us.

      Until the hammer falls, the economy flattens, job losses continue and OBAMA keeps acting as dim as he is now, no one will care. No one but the real world participants that know that value comes from worth and worth comes from sustainable value in relationship to need and the free desire to earn it and pay for it.

      OBAMA, Pelosi and Reid know they must rape the till, impose socialist systems and then force the debt recovery so freedom and capitalism has no chance of winning back the country. Debt will enslave the nation to the will of who ever controls how the dollar, or your worth is spent. Debt is the key, debt is the tool and forcing it maintains fear that encourages the desire for more controls.

      These are sorry times for America to have been duped into a stupor because JWB was so naive to think absence of economic diligence on his part wouldn't affect our future. I can only say that Bush mustn't have been aware of the; what if my party fails to defend America from Marxism and we only win the war on terror to be replaced by fighting for our very foundation of freedoms at home??

      Sad when the only revolution that is occurring is the one to destroy Americans self earned worth and hand it over to government bureaucrats to deal it away for political gains and a forced mandate toward a Marxist agenda.

      The fallow job market has not been addressed for a year now as millions are still out of work while bureaucrats in Washington get added to our ever increasing tax burden.

      OBAMA, Pelosi and Reid are doing exactly what they wish……punishing America for not being socialistic enough for their way of thinking and making us pay for their ineptitude at understanding mere economics and how it relates to human worth.

      We need a new tax code but more importantly we need a new Congress!!

      We are truly heading for the sorrow that eastern Europe embraced for as long as Marxisms poison bled the people of their worth.

    4. William R. Barker, H says:

      John,

      I for one am GLAD that these tax "breaks" have expired. (Although I'm guessing that the Senate will restore them in short order upon reconvening.)

      I'm for a flatter tax system, a more honest tax system where it's not who has the best accountant who "wins" but where all Americans are treated as equally as possible.

      Tax "loopholes" are the antithesis of tax transparency. Oh, sure, they're "there" in black and white within a tax code of seven million plus words, but each "complication" to the tax code benefits those with the resources to "play" the "game."

      Let people be taxed! Let people FEEL the heavy hand of government greed. Perhaps pain is the only "feeling" which will wake the American People from their stupor.

      Listen. Even if one believes in the righteousness of some degree of progressivity in our federal, state, a city income tax codes, going beyond a pure and simple bottom to top "rate" system pits married adult against unmarried adult, homeowner against renter, parent against non-parent, and so on and so forth.

      Let Americans decide for themselves – with neither carrot nor stick employed for or against them – how they live their lives. No tax punishment for living one's life in a manner the government doesn't view as optimal; on tax reward for toeing the line.

      If you believe in Freedom then you'll see my point.

      BILL
      http://www.usalyright.blogspot.com

    5. Judith in Michigan says:

      There is no mention of this outrage anywhere on the MSM, so far, and probably won't ever be mentioned. Are the Democrats hoping we citizens won't notice? This wasn't just a mere lapse. It is deliberate, and Congress has no intention of revisiting these "tax breaks".

      Where are the Republican leaders? They should be pounding this as loud as they can, starting today and continue daily until every American citizen realizes how this administration has deceived and lied to us.

      No tax increases for the poor and middle class?

      "We ain't seen nothin' yet!"

    6. Joe Jepsen Dandridge says:

      H.R. 25 The FairTax bill would Abolish the IRS and end ALL taxes. It would replace them with a consumption tax.

      Please sign the petition to Charlie Rangel, Chairman of the powerful House Ways and Means Committee, to bring the FairTax bill to a vote!

      http://www.fairtax.org/hearing

    7. Janine Linn, KS says:

      Have you been to a military funeral lately? There are activists now who show up to these funerals stomping on flags, carrying signs that say, "The only good soldier is a dead soldier". Some of these protestors even try to pick fights with family members so they can sue in court-and win. AT A FUNERAL! And they are "protected" by the first amendment. We need more then a new tax code and a new Congress. We need to get back to the basics of what our country was founded on and stop trying to rewrite the constitution! When our country was first established the act of stomping on the American Flag was considered traitorism.

    8. Pingback: HAPPY NEW YEAR! « The View from Southern California

    9. Emily, Holland, MI says:

      Whicket, I think a lot of us are yelling as loudly as we can, but its falling on deaf ears. Where can we, the average Americans, even start to make a difference? We've written our congresspeople, called them, and gone to teaparties. We blog and spread awareness of the corruption. And most importantly, we pray that God will defeat these evil schemes. Beyond that, I don't know what else we can do.

    10. Amy, PA says:

      Ugh. Tell the roadblock republicans to go home and stop stalling our government so this stuff won't happen!

    11. Sabrina Teplin, Long says:

      No Mans Life, Liberty or Property are Safe while the Legislature is in Session.

      —Mark Twain

    12. Bob, Orange City, Fl says:

      I regret the demise of ANY tax break – but please explain why these particular items are any different than:

      –Special perks for our Legislators, including their health coverage-

      –Odd (and some VERY ODD) tax breaks for various business activities (Ethanol, sugar, etc. all having no valid economic reason to the consumer)-

      –Special provisions in the health bill to exempt various states from certain provisions(to no benefit except the Senator)–

      –and a million others I sure you can add…..

    13. Pingback: Happy Your Ass Will Be Taxed Year | Feed Your ADHD

    14. Bobbie Jay says:

      For what reason are these impositions being put on the people? For what reason is government intervening in the private sector, complicating businesses in the private sector? SPECIFICS not excuses. The people have a right to legitimate reasons and i haven't heard one, yet? If it's failures in government themselves, then it should come out of their amenities, benefits and reduction of their unearned pay. These people are unworthy of all perks and pay.

      Are members of congress and the president and appointees and every follower of the president, immune from the code of ethics? A code created so people could trust those running, or in government, at their word to avoid deliberate attempt to take this country, her principles and values away?

      Why does the private sector abide by the laws but the president and government doesn't have to? That's not equality in America? This is wrong and they know it. Government wants complacency to their immorality…

      Heads up, Keep focused, Stand Strong, God Bless

    15. Pingback: Welcome to 2010, now grab your wallets! | The Political Fish

    16. Stirling, Huntingdon says:

      As a taxpayer it's painful to watch good money go out each year to this government, at least with charitable giving you get to choose a worthwhile cause that acts "in your best intrest."

      As long as the mantra in governmnet is "Spend, Print and Borrow" we will never have a fair tax system, and more and more people will be asked to shoulder the debt. Government won't change until the debt is low enough to "remove" rather then "add" more taxes to fund this "bloated" thing we call government.

      So when this administration says we will be 1.5 trillion in debt each year for the next 10 years, they are saying "no tax reductions"

    17. Pingback: The Cloakroom » Cloakroom Reading List II: Life, Marriage, Taxes and Wha?

    18. Sheila, Jacksonville says:

      Our 33 yr. old construction business couldn't have survived all these yrs. by irresponsible spending and borrowing. What makes the Government think it can? While small businesses comprise of over 80% of the American businesses, how can we possibly foot the bill for the Federal deficit when we're strapped already. While good business owners in our industry are laying off employees and some are closing their doors, leaving their valuable commercial properties vacant and adding a heavy burden on property owners as well, 2010 and beyond will be very difficult yrs. Tax breaks are needed, not more taxes. When will this Administration wake up? They're leaving the small businesses out of the loop.

    19. Pingback: Inaction means higher taxes | Worth Reading

    20. Pingback: HAPPY TAX YEAR! « Waveland Watchers

    21. Pingback: HAPPY TAX YEAR! « Armageddonoutahere’s Weblog

    22. Pingback: News for 1/6/2010 « Watchdog Central Dog House

    Comments are subject to approval and moderation. We remind everyone that The Heritage Foundation promotes a civil society where ideas and debate flourish. Please be respectful of each other and the subjects of any criticism. While we may not always agree on policy, we should all agree that being appropriately informed is everyone's intention visiting this site. Profanity, lewdness, personal attacks, and other forms of incivility will not be tolerated. Please keep your thoughts brief and avoid ALL CAPS. While we respect your first amendment rights, we are obligated to our readers to maintain these standards. Thanks for joining the conversation.

    Big Government Is NOT the Answer

    Your tax dollars are being spent on programs that we really don't need.

    I Agree I Disagree ×

    Get Heritage In Your Inbox — FREE!

    Heritage Foundation e-mails keep you updated on the ongoing policy battles in Washington and around the country.

    ×