Whether you filed your taxes early or will join the last-minute crowd this weekend, let me ask: Are your taxes too low?
Chances are, you said no. But Congress must not agree. Because under the budget resolutions recently passed by the House and Senate, you can expect your taxes to go up -- and by quite a bit. Lawmakers approved bills that would repeal tax relief, increase spending and blithely ignore the biggest fiscal challenge facing our country.
These are the first budget documents produced by Democrats since they regained control of both chambers in November. The bills still have to go through a conference committee to settle on a single piece of legislation to be delivered to President Bush. But let's take a closer look at what lawmakers have wrought so far.
Both bills project that tax revenues over the next five years will go up. Fair enough: Revenues have increased in the last five years, as a direct result of the supply-side cuts in tax rates that the president advocated -- rates that are set to start rising soon.
Look closer, though. The numbers used in these bills are almost identical to what the Congressional Budget Office estimates revenues will be if the tax rates are allowed to rise and if the Alternative Minimum Tax isn't fixed. (The AMT is expected to take a bite out of the pocketbooks of 19 million American households this year.)
This amounts to a massive tax increase. Under the Senate bill, the average household's taxes would jump $2,641 each year over the next decade.
And here's a word to the wise: If this budget passes, it might be smart to plan to hire a food taster in 2010. The death tax, which has been gradually reduced in recent years, goes away completely for that one year. But if lawmakers don't make its repeal permanent, the death tax is set to come back in full force in 2011. Die at the "wrong time," and your family could get hit with a crippling tax bill.
The Senate budget also calls for $18 billion more in non-emergency discretionary spending than the president proposed in his budget. That's almost a 9 percent increase in just one year. It's safe to say that few Americans enjoyed a 9 percent raise last year. The House version aims to boost discretionary spending by an additional $69 billion over five years.
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