You've probably heard by now that the Senate has decided not to vote on the expiring Bush tax cuts.
There are lots of reasons: the upcoming Nov. 2 election, dissension within the Democratic ranks as to which tax cuts to keep, the upcoming Nov. 2 election, the lack of time to get a bill passed in the Senate and then reconciled with the House and, oh yeah, the upcoming Nov. 2 election.
Yep, Senators are worried that the "nuances" of a tax cut vote might not be properly interpreted by us voters. They're concerned that we might not be able to figure out that some folks, specifically those making a lot of money, would end up paying more and the rest of us would keep paying at the tax rate under which our incomes now fall.
Thanks for the vote of confidence, Washington!
Senate leaders say they'll take up the expiring 2001 and 2003 tax cuts in November when they return for a lame-duck session. But if they don't do something soon after they reconvene, we're all going to be paying higher taxes, at least for a while.
The IRS says that early November is the absolute final deadline for it to get 2011 payroll withholding information out to employers so companies will be able to implement the the taxes by the start of the new year.
That means the IRS is going to be using the current law, which says on Jan. 1, 2011, tax rates will change, and by change I mean increase.
Of course, if Congress eventually does decide to keep at least some of the current lower tax rates, the IRS will make the payroll tax calculation changes and everybody will get the over-withheld money back. We'll just get it back weeks or months later.
Guess what, Congress? I can guarantee you that there will be no misinterpretation of the nuances of smaller paychecks.
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