My Fiscal Cliff Solution - Tax Edition

Let the Payroll Tax Cut expire.

Delete the Alternative Minimum Tax.

Make the tax cuts from the 2009 Stimulus permanent.

Make the 100% expensing of business purchases permanent.

Increase the R&D Tax Credit to 25% of 100% of the last three year's average.


Bush Tax Cuts - If they Expire and the Alternative

The child tax credit will be reduced from $1000 to $500.  Increase it to $1500.

The 10% income tax rate will expire.  Keep it and add a 1%, a 2.5%, and a 5% bracket.

Dividend tax rate will increase.  Remove all taxes on dividends and interest.

Marriage penalty reduction will expire.  Make it permanent.

Employer-provided child care credit will be reduced.  Maintain as is.

Adoption tax credit will be reduced.  Maintain as is.

Dependent care tax credit will be reduced.  Maintain as is.

Tax on bonds for school construction will be increased.  Maintain lower rate.

Tax on scholarships will be reinstated.  Wipe this from the history books.

Student loan interest deduction will decrease.  Maintain this.

Employer provided education assistance will decrease.  Maintain this.

Highest rate going from 35% to 42%.  For $1 million and above.

The 25% bracket will increase to 28%.  Reduce to 20%.

The 33% bracket will increase to 36%.  Keep it at 33%.


Proposed New Taxes

Capping itemized deductions.   No cap needed.

Capital gains tax from 15% to 20%.  Reduce it to 0.0%.

Millionaire tax.   See the Bush Tax Cuts above.

Spectrum Tax - a tax on mobile phone and other devices users.  Time to start this one.

Capital gains earned by managers of investing partnerships increased to their ordinary income rate.  This is punitive and stupid.

Airplane Tax Hike - depreciable life of aircraft to be extended from 7 to 12 years.  Decrease it to 5 years.

Ten additional tax increases on selected energy companies.  Remove all subsidies, loan guarantees, and credits. Tax the energy industry in all its facets the same as any other industry.