Taxmageddon

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Expiration Date

Monday, February 20th, 2012

Lots of talk and worry has been expended over an unfortunate aspect of the ancient Mayan calendar: it was calculated to run through 2012 but no further.

Some folks, placing inordinate weight on pre-Aztec American time-keeping, think that spells the end of the world.

As preposterous as the movie about this was, there are a few things to be expected at the end of this year that have a touch of the hand of Doom.

Bush-era tax rates expire, for instance.

Isn’t it strange how a lowered tax rate must expire, but higher rates don’t get a similar sunset treatment?

Anyway, on December 31, 2012, tax rates go up. The Washington Post relates that some folks are calling this “Taxmageddon,” and it could be a disaster for our faltering recovery:

Overnight, the marriage penalty for joint filers will spring back to life, the value of the child credit will drop from $1,000 to $500, and the rate everyone pays on the first $8,700 of wages will jump from 10 percent to 15 percent.

The just-agreed-to payroll tax reprieve also has a built-in expiration date, so FICA withholding will go up 2 percent as well.

Though folks are running scared about this, politicians are girding their loins for a big fight. Or “negotiation.” Or something.

Meanwhile, no real cuts in spending can be expected, especially if President Obama wins in November, as seems increasingly likely.

And the U.S. government continues to borrow an additional six billion dollars every business day. I fear more than one thing is set to expire.

This is Common Sense. I’m Paul Jacob.