As we all know, this is an election year and there are some tax issues being discussed.  Here are some of the terms you may want to brush up on during the coming months.
Bush Era Tax Cuts – Time sure has passed by quickly.  Enacted in 2001 and 2003 for expiration in 2010, legislation extended these cuts to now expire yearend 2012.  The cuts included a lower federal income tax rate, special maximum rates on long-term capital gains and increased standard deduction amounts.  There will be quite a bit of discussion on whether we should extend these cuts and to whom.
Flat Tax – A simplified version of taxation, flat tax rates are just that, a single tax rate to individual income/wages.  There is also talk of a separate rate for business as well as exemptions for lower income families.
Buffet Rule – This ‘rule’ came about in an opinion written by Warren Buffet and published in the NY Times on August 14, 2011.  Warren stated that he and his ultra-wealthy friends paid less total tax as a percentage of taxable income than the other 20 people in his office.  This piece resonated with many individuals in the 99 percent category and continues to gain momentum.
Value Added Tax – Value added taxes are often compared to national sales taxes but are in fact different.  A value added tax would be assessed and collected at each point in the production chain, from manufacturing to final retail sale.
For more information, please call Damon Simpson at Professional Tax and Financial Services, 661-259-1967.