13 Tax Increases in 2013. No one gets left out. We all pay our fair share. How nice.
New Year’s Day was tough for taxpayers. Thirteen tax increases kicked in.
The deal that Congress and President Obama struck that finally—but only partially—avoided the fiscal cliff resulted in seven tax increases.
Those hikes combined with six tax increases from Obamacare that also began on New Year’s Day.
13 Tax Increases That Started January 1, 2013
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.
President Obama promised the American people a “balanced approach” of tax increases and spending cuts to reduce deficits and debt. He has achieved the tax increase portion of that approach. Now Congress needs to force him to follow through on the spending cuts portion.
MORE TO COME. OPEN YOUR WALLETS JUST A LITTLE FURTHER PLEASE.
I don't think we can complain about the "biggie" which is #1 the Social Security tax "increase." This isn't really an increase at all, merely restoring the Social Security tax to what it was supposed to be all along. It was bad policy to give the temporary reduction of 2% as that only helped make the system more insolvent than in already was and will inevitably lead to tax increases in the future.
The other tax increases are moderate. All in all it was a good deal for both sides.
" It was bad policy to give the temporary reduction of 2% as that only helped make the system more insolvent than in already was and will inevitably lead to tax increases in the future."
That is not really true. The 2% cut came out of the general budget and reimbursed SS the 2%. It was just seen as a way to give people already not paying income tax some welfare back for the 2 years. They could not cut their taxes as they were not paying taxes except for SS.
Of course, the 2% that was "paid out of the general fund" is a joke because all the SS money was borrowed by the general fund over the years. SS is just a bunch of IOUs anyway.
LOL - I'll bet a whole lot of Democrats and Obama voters thought so too. I sincerely hope they all enjoy their loss of disposable income. After all, the are all getting exactly what they wanted/voted for.