Remember this when you vote in  November.

 In  just six months, on January 1, 2011, the largest tax  hikes in the history of America will take  effect.

They  will hit families and small businesses in three  great waves.  On January  1, 2011, here's what happens... (read it to the end,  so you see all three waves)...

First  Wave:

Expiration  of 2001 and 2003 Tax Relief.  

In  2001 and 2003, the GOP Congress enacted several tax  cuts for investors,  small business owners, and  families.

These  will all expire on January 1,  2011.

Personal  income tax rates will rise.

The  top income  tax rate will rise from 35 to 39.6 percent (this is  also the rate at  which two-thirds of small business profits are  taxed).

The lowest  rate will rise from 10 to 15 percent.

All  the rates in between  will also rise.

Itemized  deductions and personal exemptions will  again phase out, which has the same mathematical  effect as highermarginal tax rates.

The  full list of marginal rate hikes is  below:

    *   The  10% bracket rises to an expanded  15%

    *       *   The  25% bracket rises to 28%

    *       *   The  28% bracket rises to 31%

    *       *   The  33% bracket rises to 36%

    *       *   The  35% bracket rises to 39.6%

Higher  taxes on marriage and family.

The "marriage  penalty" (narrower tax brackets for  married couples)  will return from the first dollar of income.

The  child tax credit  will be cut in half from $1000 to $500 per child.

The standard  deduction will no longer be doubled for married  couples relative to  the single level.

The  dependent care and adoption tax  credits will  be cut.

The  return of the Death Tax.

This  year only,  there is no death tax.  (I'ts a quirk!) For  those dying on or after January 1, 2011,  there is a 55 percent top death tax rate on  estates over $1 million.  A person leaving  behind two homes, a business, a  retirement account, could  easily pass along a death tax bill to their loved  ones.  Think of the farmers who don't make much money, but their land, which they purchased years  ago with after-tax dollars, is now worth a lot of  money.  Their children will have to sell the farm, which may be their livelihood, just to pay the  estate tax if they don't have the cash sitting  around to pay the tax.  Think about your own family's assets.  Maybe your family owns real  estate, or a business that doesn't make much money,  but the building and equipment are worth $1 million.  Upon their death, you can inherit the $1  million business tax free, but if they own a home,  stock, cash worth $500K on top of the $1 million  business, then you will owe the government $275,000  cash!  That's 55% of the value of the assets  over $1 million!  Do you have that kind of cash  sitting around waiting to pay the estate  tax?

 Higher  tax rates on savers and  investors.

 The  capital gains tax will rise from 15 percent this  year to 20 percent in 2011.

 The  dividends tax will rise from 15 percent this year to  39.6 percent  in 2011.

 These  rates will rise another 3.8 percent in  2013.

 Second  Wave:

 Obamacare

 There  are over twenty new or higher taxes in Obamacare.  Several will first go into effect on January  1, 2011.  They include:

 The  "Medicine Cabinet Tax"

 Thanks  to Obamacare, Americans will no longer be able to  use health savings  account (HSA), flexible spending account (FSA), or  health reimbursement  (HRA) pre-tax dollars to purchase  non-prescription, over-the-counter medicines (except insulin).

 The  "Special Needs Kids Tax"

 This  provision of Obamacare imposes a cap on flexible  spending accounts (FSAs) of  $2500 (Currently, there is no federal government  limit). There is  one group of FSA owners for whom this new cap will  be particularly cruel and onerous: parents of special needs children.  There are thousands  of families with special needs children in the  United States, and  many of them use FSAs to pay for special needs  education.  Tuition  rates at one leading school that teaches special  needs children in  Washington , D.C. ( National Child Research Center )  can easily exceed $14,000 per  year.  Under  tax rules, FSA dollars can not be used to pay for  this type of special needs  education.

 The  HSA (Health Savings Account) Withdrawal Tax  Hike.

This  provision of Obamacare increases the additional tax  on non-medical early withdrawals from  an HSA from 10 to 20 percent, disadvantaging them relative to IRAsand other tax-advantaged accounts,  which remain at 10 percent.

Third  Wave:

The  Alternative Minimum Tax (AMT)  and Employer Tax Hikes When  Americans prepare to file their tax returns in  January of 2011, they'll  be in for a nasty surprise-the AMT won't  be held  harmless, and many tax relief provisions will have  expired.   

The  major items include:

The  AMT will ensnare over 28 million families, up from 4  million last year.  According  to the left-leaning Tax Policy Center, Congress'  failure to index the AMT will lead  to an  explosion of AMT taxpaying families-rising from 4  million last year  to 28.5 million.  These families will have to calculate their tax burdens twice, and pay taxes at the higher level.  The AMT was created  in 1969 to ensnare a handful of  taxpayers.  Small  business expensing will be slashed and 50% expensing  will disappear.

Small  businesses can normally expense (rather than  slowly-deduct, or "depreciate")  equipment purchases up to $250,000.  This will  be cut all the way down to $25,000.  Larger  businesses can currently expense half of their purchases of equipment.  In January of 2011, all  of it will have to be  "depreciated."

 Taxes  will be raised on all types of  businesses.  There  are literally scores of tax hikes on business that  will take place.  The biggest is the loss of the "research  and experimentation  tax credit," but there are  many, many others. Combining high marginal tax rates with the  loss of this tax relief will cost  jobs.

 Tax  Benefits for Education and Teaching  Reduced.

 The  deduction for tuition and fees will not be  available.

 Tax credits for  education will be limited.

 Teachers  will no longer be able to deduct  classroom expenses.

 Coverdell Education  Savings Accounts will  be cut.

 Employer-provided educational  assistance is curtailed.

 The student loan interest deduction  will be disallowed for  hundreds of thousands of  families.

 Charitable  Contributions from IRAs no longer  allowed.

 Under  current law, a retired person with an IRA can  contribute up to $100,000  per year directly to a charity from their IRA.

This contribution  also counts toward an annual "required  minimum distribution."  This ability will no longer be  there.