Rep. Charles Rangel, D-N.Y., picked a busy time to temporarily step aside as chairman of the tax-writing House Ways and Means Committee.
A host of tax cuts, most enacted in 2001 and 2003, are scheduled to expire at the end of the year.
If Congress doesn't act, this is what taxpayers will face Jan. 1:
• The top two marginal tax rates would increase, with the top rate going from 35 percent to 39.6 percent. The increase would affect individuals making more than $171,850 and couples making more than $209,250. President Barack Obama has asked Congress to limit the tax increases to individuals making more than $200,000 and couples with incomes more than $250,000.
• Tax rates also rise for just about every other income level. The lowest tax rate would rise from 10 percent to 15 percent. This year that 10 percent rate applies to taxable income under $8,375 for individuals and under $16,750 for couples.
• The child tax credit would be reduced from $1,000 to $500.
• The top tax rate of 15 percent on dividends would expire, leaving dividends to be taxed as regular income, with a top rate of 39.6 percent.
• The top capital gains tax rate of 15 percent would increase to 20 percent.
• The federal inheritance tax, which has been gradually phased out over the past several years, will return with a 55 percent tax on estates above $1 million.
© Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.