Tag Archives: Tax Hike

News

A primer on the fiscal cliff facing us in January 2013: tax hikes and Obamacare

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This is a medium-length article from the Tax Foundation. I found it fascinating to read, because I am busy making plans myself to deal with the next four years under Barack Obama.

Excerpt:

On December 31, 2012, a large swath of the federal income tax code is scheduled to expire, an event which has come to be known as the “fiscal cliff.” Among the expiring provisions are the 2001 and 2003 tax cuts enacted under President Bush, a compromise on the estate tax, a “patch” in the Alternative Minimum Tax (AMT) reducing its impact, the temporary 2 percent payroll tax holiday, increased business expensing, and the “extenders” package of miscellaneous tax deductions. On January 1, 2013, five taxes enacted as part of the Patient Protection and Affordable Care Act (PPACA)—popularly referred to as Obamacare—also take effect, along with sequester spending reductions of $109 billion due to the failure of the “Supercommittee” to reach consensus on budget reductions.

In late February, the U.S. government will hit the debt ceiling, exhausting its ability to borrow to finance ongoing spending without an increase by Congress. Finally, the federal government’s continuing resolution appropriating spending expires on March 27, 2013.

Here are some of the things to look out for, which are all described in detail in the article:

  • 2001 and 2003 Tax Cuts Expiration
  • Estate Tax Increase
  • Alternative Minimum Tax
  • Payroll Tax Increase
  • Business Depreciation Expense
  • Taxes in PPACA (Obamacare)
  • Debt Ceiling
  • Sequestration

I am most concerned about income tax increase, the capital gains tax increase, the dividend tax increase and the payroll tax increase. These are all going to clobber me. I will have less money for charity and savings, and will have to retire later – and have less time for my Christian activities as a result of having to work longer. The voters in the last election have decided that I must sacrifice more of my earnings so that Obama can hand it all out to his constituents in exchange for their votes.

It helps to know exactly what will be changing in the future, because I have to know how to respond to this. Some adjustments that I might make cannot be done at the drop of a hat. Some take months to plan and execute. It’s best to think about things in advance. We have two deadlines: December 31st and March 27th. It will be interesting to see  what Washington decides to do.

UPDATE: James Pethokoukis of AEI explains the significance of the tax increases for capital gains and dividends. Other countries have lower rates on these taxes, so expect the capital that funds businesses and creates jobs to leave the country. Obama likes to rail against outsourcing, but he actually causes it – because of his ignorance.

News

75% of the costs of Obamacare will be paid by those making $120,000 or less

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The video shows the chief economist of the Wall Street Journal, Stephen Moore, making the claim that nearly 75% of Obamacare costs will fall on the backs of those Americans making less than $120,000 a year. (H/T Gateway Pundit)

The Heritage Foundation explains more, using the official numbers from the Congressional Budget Office. (H/T Bad Blue)

Excerpt:

President Obama repeatedly promised not to raise taxes on middle-class families. Yesterday, the Supreme Court ruled that he already has.

Chief Justice John Roberts upheld the President’s health care law on the grounds that the “individual mandate” is a constitutionally permissible tax increase. This violates Obama’s pledge. Middle-class families will pay the vast majority of these new taxes.

Obamacare imposes a penalty—or tax increase—on Americans who do not purchase health insurance. The Congressional Budget Office estimates that most of those paying these taxes are middle-class individuals and families making less than 500 percent of the federal poverty level: $59,000 for an individual and $120,000 for a family of four. Three million lower-income and middle-class Americans will pay an estimated $2 billion in these “mandate taxes.”

The Supreme Court’s interpretation puts the President in a peculiar situation. In 2008, he promised not to raise taxes on the middle class and accused Republican nominee John McCain of wanting to tax health benefits: “And I can make a firm pledge: under my plan, no family making less than $250,000 will see their taxes increase…not any of your taxes. My opponent can’t make that pledge.… [H]e wants to tax your health benefits.” Who could have predicted that Obama would raise taxes on millions of Americans who do not have health insurance?

Obama grossly mischaracterized his health care plan, and now American citizens will pay the price. He has both attacked individual freedom and burdened millions in the middle class.

I thought that Obama said that he would raise taxes on the middle class? For a full list of the taxes in Obamacare, click here.

News

In 2013, taxpayers will be paying more of their incomes to government

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From CNS News.

Excerpt:

The tax increases scheduled to take effect in January 2013 – dubbed Taxmageddon – could have the American people spending more days than ever working to pay for federal and state government, areport from the Tax Foundation shows.

A host of tax rates are scheduled to rise in January 2013 – when George W. Bush-era tax rates and the annual patch for the Alternative Minimum Tax expire – leading to a tax increase of approximately $500 billion in 2013, according to the conservative Heritage Foundation.

The Congressional Budget Office reported in January that taxes would increase by $4.6 trillion over ten years, if Congress allows the rates to rise as scheduled at the end of this year.

Tax Foundation economist William McBride estimated that this historic tax increase would push Tax Freedom Day to its latest point ever.

Tax Freedom Day is the day when – theoretically – Americans begin working for themselves and can stop paying for government. It assumes that 100 percent of a person’s wages go to paying for federal and state tax burdens. The day when government operations are fully paid for is Tax Freedom Day.

In 2012, Tax Freedom Day was April 17. However, Taxmageddon may push it until the end of April or beyond, McBride reported in a blog post on the foundation’s website. At the federal level, the 2012 tax increases would add 11 days to the Tax Freedom Day calculation, pushing it to April 28.

Adding in rising state and local tax revenues could push Tax Freedom Day beyond its May 1 record.

The Taxmageddon provisions adding to the cost of government – measured in the days that Americans will spend paying for it – are as follows:

  • Bush tax rates – 2.6 days
  • Alternative Minimum Tax – 2.2 days
  • Small business tax cuts – 0.4 days
  • Corporate income tax – 3.4 days
  • Payroll tax cut – 2.5 days
  • Estate tax – 0.2 days

One of the problems with all of this voting for bigger government is that there is less money for people to make their marriages and families work. The more we vote for bigger government, the less we haves as individuals for our own plans, including our marriage and family plans.