I will be very busy the next few days with errands and other business. Today’s post will be short and it’s likely there will be no post tomorrow. Life should return to something like normal by Friday.
Yesterday’s post topic was about all the new, higher taxes that will be appearing on paychecks. The Heritage Foundation itemized and clarified some of those new, higher taxes.
Tax increases in the fiscal cliff deal:
1. Payroll tax: increase in the Social Security portion of the payroll tax from 4.2 percent to 6.2 percent for workers. This hits all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” will lose “an annual income boost of $1,000.”
2. Top marginal tax rate: increase from 35 percent to 39.6 percent for taxable incomes over $450,000 ($400,000 for single filers).
3. Phase out of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
5. Tax rates on investment: increase in the rate on dividends and capital gains from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).
6. Death tax: increase in the rate (on estates larger than $5 million) from 35 percent to 40 percent.
7. Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases by businesses.
Obamacare tax increases that took effect:
8. Another investment tax increase: 3.8 percent surtax on investment income for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).
9. Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax for incomes over $250,000 ($200,000 for single filers).
10. Medical device tax: 2.3 percent excise tax paid by medical device manufacturers and importers on all their sales.
11. Reducing the income tax deduction for individuals’ medical expenses.
12. Elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy.
13. Limitation of the corporate income tax deduction for compensation that health insurance companies pay to their executives.
Each of these 13 tax increases will slow the economy, meaning that businesses will create fewer jobs. Fewer jobs will make it even more difficult to land a job than it already is for the more than 12 million Americans looking for work.
President Obama demanded these higher taxes. Obama’s tax increases, in Obamacare and through the fiscal cliff deal, will not curb deficits and debt, because growing spending is driving America’s budget crisis. Congress needs to immediately turn its attention to the actual cause of our deficit and debt problem: too much spending. The proper way to address this problem is through reforms to entitlement programs.
However, the taxes above aren’t enough for the democrats. They want more. One Trillion Dollars more! Their rapacious appetite for money and spending is criminal.
Dems look for up to $1T in new revenues
By Alexander Bolton – 01/07/13 05:00 AM ET
Democrats say they want to raise as much as $1 trillion in new revenues through tax reform later this year to balance Republican demands to slash mandatory spending.
Democratic leaders have had little time to craft a new position for their party since passing a tax deal Tuesday that will raise $620 billion in revenue over the next 10 years.
The emerging consensus, however, is that the next installment of deficit reduction should reach $2 trillion and about half of it should come from higher taxes.This sets up tax reform as one of the biggest fights of the 113th Congress, which began on Thursday.
Republicans say tax reform should be revenue-neutral. Additional revenues collected by eliminating or curbing tax breaks and deductions should be used to lower rates.
If you read that last paragraph carefully, you’ll see that the ‘Pubs are proposing tax increases, too. Their method is just a bit different. They want to eliminate some long-time tax deductions—mortgage interest, charitable giving, tithes, perhaps. If that is their plan, why not just institute an across-the-board flat tax like that proposed by Malcolm Forbes, jr.? A flat tax works and is used around the world from Ecuador to Russia to Communist China.
According to a poll, only 8% of Congress consider themselves Tea Partiers. This is down from 24% in 2010. It’s time for the Tea Party to flex its muscles, again, and remove these hypocrites come 2014.