Here’s a strange and likely little noticed provision included in H.R. 4853, The Middle Class Tax Relief Act of 2010. The bill, sponsored by House Ways and Means Chairman Sander Levin (D-MI), permanently extends tax rates for those making under $250,000 – de facto raising taxes on those making over $250,000. But, it also goes one step further and creates a whole new tax bracket of 36 percent – increasing the number of brackets from six to seven. Why you ask?
Democrats have promised not to raise taxes on those making under $250,000, but the current bracket of 33 percent kicks in at $209,000. Yikes! What’s a politician to do? President Obama proposed a simple expansion of the 28 percent bracket, giving a tiny break to those who fell into the crack. But that was just a bit too generous for Chairman Levin. So, he created an entirely new 36 percent tax bracket for that narrow window of income.
So much for the Christmas spirit, eh?
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