Cap Wiley, CBIZ Tofias, on the Taxmageddon we may face

-- high hopes for the stock market RD -- Okay if you like Christmas because I'm seeing a lot of Reading -- -- In front -- -- Dow is up nine S&P is down. Flight ticket thirteen point five. NASDAQ down three points to 2854. Oil is 23 cents. Ten -- US treasuries so lightly down not much one point 63 you've got cooled down eighty cents to 1590s so what's next. -- What was -- engine well that is the gas pump panel you've got to be but -- Dexter. At 68680. On apple mortgage -- line in the words gas to us annually and ask all right well folks I've got bad news. Tax rates are going up in less than seven months we're joined by -- while he's a CPA in managing director at CB is to opiates. -- welcomed the show Daria Dolan. Behind Barry Elliott. So just. What happens to tax rates on January 1 if the if the bush tax cuts are allowed to expire. I think we close tax Armageddon. Yeah it's bad I read your article I'm like holy smokes I don't think people know this. Most people don't and let's run through. I would say planning is. Or you know and CPAs tried to a lot of planning it's almost impossible. I'm working off of a list of things critics by church after this year and it. It is 49 items on the list. On number one on the list though is the top bracket goes what from 35 to 39 point six. -- -- And is that lower brackets goto 10% bracket disappears. All the other brackets go up to what they were ten years twelve years ago. So who gets hurt the most is -- the little guy is at the middle guy enough height the guy making a lot of money or do we all get scored. I think you get screwed the ones that bothered me the most is a small businesspeople who. You know report there -- home from the company's -- as corporations and Astros and there they're they're marginal rates are going up from 35 to 39 point 6% of its it's it's been discouraging. Tell us about this Medicare tax because. This is it eight add on January 1 there's some new tax that nobody is aware of but we're talking about it. Yeah there's it is a new taxes and Medicare or hospital taxes can be done under earned income -- time ever. And it's going to be at three point 8% surcharge or additional tax. On your investment income. Investment income now would if you or a sub -- a business owner. And the end of the year you kind of clean out your profits right let's say you had 50000 dollars in profits. At the end of the year -- paid yourself you're souring a major -- in your -- and everything else and and you pull 50000 in a bonus under the business. Well -- corporations don't pay any ordinary income tax rate that's gonna go from. 35 to 39 point 6% that's not really investment income. So what -- you welcome to your tax increase at that point. While while so. Medicare now what about the the Medicare tax that comes out of our paycheck every week -- IDF fight the end and part of it's going for social security and part of it's cool for Medicare is that increasing next year. -- that sun's out it has got to go that goes on all income yeah there is talk about increasingly Social Security. Portion of that but that has not come to fruition yet. Now cap that the three point 8% tax that you just talked that Medicare tax. -- that on all wage -- so far make in 60000 a year do I have to pay. Point 8%. Yes. Well. I think you inherited your wager you -- -- employer is that. -- what's going on with capital gains rates and dividend tax rates next year. Well the big one that bothers me that the most is. Dividends qualified dividends and say. Effective rate. 15%. That's gonna go back ordinary income rates that could be as high as 39 point six the one thing it -- is not being discussed. Even at 15%. And give it a qualified dividends paid after corporate tax of 35%. So even in today's market that dividend is taxed the highest income in our system. We've now talked about dividends going to effective rate of 39 point six. Lost three point eight. The corporate tax 35%. As well 50%. Where where's all this come -- for I mean it is this. Is this what we used to live in back in in ten years ago. -- Yes yes. We -- we were back and that in that area. Well we have more deductions respect and then there was you know the bush came along and the president was came along and he won that we'll -- economy and you know the bush tax cut did help the economy we did not have those -- would've been in. Serious recession back in the early nineties. -- Out the a state tax what's going on with the federal estate taxes because that was. If I remember when George Bush was running for office back in. 2000. That was a big deal right the the. Are you tell me who's gonna win the election. Aaron that's loaded assault all of this seems to boil down to who wins -- election. Exactly exactly and -- in and I -- I'm -- pretty close contact with what's happening in Washington a regular basis yeah everybody is saying this is all going to be done in the in the lame duck session. I calculate -- -- lame duck session is 36 working days. It's going to be impossible that the resolve this. Yeah I don't say they can't do tax reform at 36 days there's no way to take 89 months to do you know of thorough tax reform when it. If they ever do their taxes -- The state going back in question and -- they actually state tax. -- back when it passes you know they scheduled LaSalle for ten years it was going to iPod 3.5 million dollar exemption. We've -- all they never let it go to zero in 2000 and it went to zero because they couldn't make a decision. Now the negative raise it to five million dollars now has potential to go back to a million dollars. I don't think they can let that happen because they'll they'll have a real. Angry. Acts populist. If they do that but that you know I am also not come -- they can actually make a decision that. What about just doing a one year patch and then doing in next -- or any thought about. Just saying okay we're gonna leave everything as is for the calendar year 2013. And then the primary. Emphasis of the 2013. Congress will be to take care. I have heard that's going to be the plan that that it it they'll have either six months or a year. Extension of the bush tax -- But. You know the last and they end up with a payroll tax credit they did -- two months. That it's awful hard to plan. -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- You work with a lot of closely held businesses is is this something that's hindering them from making investment decisions in their companies. Most heavily and the uncertainty is just killing the economy nobody is really. Taking chances on hiring people nobody's taking chances on making investments as. They don't know -- just don't know what's gonna what what what is -- possible hires somebody. Now it's part of the problem are it will cap thank you very much for your time sure appreciate it. Okay great that's -- -- joining us today from he's a managing director at -- is --