The Word: Taxmageddon
Definition: Taxmageddon refers to several expiring tax policies (also known as the Bush-Era tax cuts) and tax increases from Obamacare slated to take effect on January 1, 2013.
What It Means: If Congress fails to come up with an agreement on tax policies during the lame-duck session, a series of tax increases will hit the middle class in January 2013. The tax policies which are set to expire are the Bush-Era tax cuts, the payroll tax holiday, the alternative minimum tax patch, and the tax extenders. On top of those, starting January 1, 2013 five taxes from President Obama’s health care reform law will start to kick in. Those new taxes are the medical device manufacturing tax, itemized deductions for medical expenses, flexible spending account cap, employer retiree coverage subsidy, and the Medicare tax increase, thus creating the doom scenario that is taxmageddon. For more on taxmaggedon, click here.
History: Taxmageddon is a term that was created by Congressional aides back in February 2012 to refer to the date of December 31, 2012 when a series of tax cuts expire and new taxes take effect.©2014 Drinker Biddle & Reath LLP. All Rights Reserved