From my financial newsletter

I thought Obama said he wasn't going to raise taxes on people making less than $200,000?

Oh well, I see that even very low income types will see their taxes go from 10% to 15% next year.

Shame on him and the Democrats for taxing regressively.

Congress can change the rules at any time, because they RULE like tyrants, they do not govern.

Taxes: Five Changes Ahead

Source: Standard & Poor's Financial Communications.

You may want to watch these five key areas, with the understanding that Congress can change current rules at any time.

Although many of us are wrapping up our 2009 returns, it's important to understand how tax changes currently scheduled to take effect in the years ahead could affect personal finances. You may want to watch these five key areas, with the understanding that Congress can change current rules at any time.

• Rates on Income In 2010, federal income tax rates are 10%, 15%, 25%, 28%, 33% and 35%. Starting in 2011, the lowest personal income tax rate of 10% will be eliminated. Remaining rates will be 15%, 27.5%, 30.5%, 35.5% and 39.1%.
• Capital Gains Maximum rates on long-term capital gains are set to increase from 15% in 2010 to 20% in 2011. Currently, those in the 10% and 15% tax brackets do not pay taxes on long-term capital gains. Next year, the lowest rate will be 10% for those in the 15% tax bracket.
• Dividends This year, qualified dividends are taxed at 15% for most taxpayers. In 2011, dividends will be taxed at a taxpayer's ordinary tax rate. Since tax rates on income also are scheduled to increase in 2011, the resulting impact on dividends could be significant.
• Estate Taxes During 2010, the federal estate tax is rescinded - but for one year only. In 2011, estates in excess of $1 million will be subject to a maximum federal estate tax of 55% and possibly higher for some larger estates. Note, however, that estate tax regulations are complex and Congress has proposed changes that could impact current and future rules. Consult a tax or estate planning expert to determine how estate taxes might apply to you.
• Gift Taxes For 2010, the top gift tax rate drops from 45% to 35%. There is a $1 million lifetime exclusion amount, which is applied to a person's taxable estate at death. For 2011 and beyond, the $1 million exclusion can be applied to gifts or estate taxes.

You may want to watch the news or work with a tax professional to make sure you understand how these and other changes could affect you in the years ahead.

Expected Tax Changes

According to current laws, the following tax changes are scheduled to take effect at the federal level. Congress can change the tax rules at any time.

	2010	2011
Personal Income Tax	10% to 35%	15% to 39.1%
Long-Term Capital Gains	Maximum of 15%	Maximum of 20%
Qualified Dividends	15%	Ordinary income tax rate
Estate Tax	Rescinded for one year	Combined estate and gift tax exclusion of $1 million, maximum tax rate of 55%, possibly higher for larger estates
Gift Tax	Maximum rate of 35%	Combined estate and gift tax exclusion of $1 million, maximum tax rate of 55%, possibly higher for larger estates