Tag Archives: taxes

Once More on Taxes

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Here are some tax changes scheduled for 1 Jan, unless the Republicans in the House can convince the Democrats in the Senate and White House to act responsibly.

  • the Bush tax reductions expire—across the board.  Low- and middle-income Americans will see their Federal income taxes rise by $3700-$4100.  Per year.
  • the payroll tax “holiday,” a 2% reduction in the Social Security/Medicare tax paid by employees (which actually did nothing but accelerate the defunding of Social Security and Medicare)
  • Obamacare taxes go into effect–$36 billion worth of them.  One of the most egregious of these is the tax on total revenue (not even limited to profit; companies losing money also will pay this—or go out of business faster, or go elsewhere to work their creativity) on medical device manufacturers for successfully innovating and producing such things as pace makers and artificial joints.
  • AMT patch will expire.  This will hit 15% of households making $75,000-$100,000 per year.  The upper bound for Obamacare’s health “insurance” premium subsidy payments is $90,000.  Go figure.
  • the death tax will rise to 55% of an estate above $1 million—up from $0 on any size as recently as 2010.

And so on.

This is what President Barack Obama insists he will allow to occur unless he gets his precious tax rate increases on the evil 2% of Americans he so despises.

Taxes—What Mandate?

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A bit more from the Senate Minority Leader.

Let me put it very clearly.  I am not willing to raise taxes to turn off the sequester.  Period.

Despite President Obama’s continued demonizing rhetoric at the expense of concrete proposals, Senator McConnell is quite clear:  tax revenues can be raised, by closing loopholes or by capping total deductions above an income level (a Romney idea being floated), but there can be no rate increases, and any revenue increases can come only in conjunction with tax reform and, insist other Republicans, with entitlement reform.

What Democratic proposals are there in opposition (or even rough conjunction)?  Obama is characteristically silent, reluctant to put his own name to anything concrete.  Senator Charles Schumer (D, NY) has a sort of idea, though, that’s pretty clear: Republicans should give up on tax reform that lowers rates in return for fewer loopholes; they should accept high(er) rates and closed loopholes.

There’s more of that bipartisanship, Progressive style.

In the end, though [emphasis in the original],

[W]e Republicans in the House and Senate think we have a voter mandate not to raise taxes.

Taxes and the Fiscal Cliff

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As Senate Minority Leader Mitch McConnell (R, KY) pointed out the other day,

[T]here is no consensus on raising tax rates.

Additionally, McConnell reminded us

[W]e still have yet to hear an actual plan from the president for addressing the great economic challenges we face.  What’s needed now is a realistic and specific proposal from the president that can actually pass the Congress.

Indeed, we haven’t heard anything President Obama in the way of a specific plan, beyond two budget “proposals” from the last session that can only be taken as having been improv satire.

McConnell laid down his marker, and it’s a correct one:

One issue I’ve never been conflicted about is taxes.  I wasn’t sent to Washington to raise anybody’s taxes to pay for more wasteful spending and this election doesn’t change my principles.

Is Obama serious or not about recovering our economy?  We’ll find out in the coming days.

Good News

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There really is some coming out of the election last Tuesday.

Reelecting President Obama notwithstanding, voters validated central conservative tenets:

  • Exit polls demonstrate that by a 51%-43% margin, Americans believe that today’s government already does too much that more properly belongs to the private sector.
  • By a 63%-33% spread, Americans said not to raise taxes as a means of cutting the Federal budget deficit.
  • Concerning the economy, the national debt, and the budget deficit generally, the voters preferred the Republican over the Democrat.
  • Voters also reelected an overwhelmingly conservative and Republican House, thereby explicitly and materially validating the House’s expression of those conservative tenets over the last two years.

There’s more.

In California, Democrats won voter approval to raise the top income tax rate to 13.3%.  More importantly, they also won a legislative supermajority.  California has in its state constitution an amendment requiring a two-thirds majority of both houses of the state’s government in order to raise taxes.  The Democrats have won that two-thirds majority in both houses.

Now we’ll have an object lesson, fresh in our minds at the time of the 2016 elections, about the outcome of Progressive policies implemented wholesale.  California will be that demonstration.  Watch carefully.

Welcome to Obamacare

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Here are some handy facts that my insurance company sent me the other day.

  1. Limit on flexible spending account (FSA) contributions.  Today, employers set their own caps on how much employees can contribute to these plans that let them use pretax money to pay for health care expenses.  For 2013, the government will enforce a $2,500 limit per employee.  [Because government Knows Better than you or your employer.]
  2. A new Medicare surtax on investment income.  Until now, Medicare taxes have only applied to earned income. For 2013, taxpayers filing individually with wages and self-employment income above $200,000 ($250,000 for married couples filing jointly) will pay a 3.8% surtax on the lower of:
    • Their net investment income—which includes interest, dividends, capital gains and other amounts.
    • The amount of their modified adjusted gross income that is greater than $200,000 ($250,000 for married couples filing jointly)
  3. An additional Medicare tax on wages and self-employment income for some.  The existing Medicare payroll tax of 2.9% (of which 1.45% is paid by a taxpayer through payroll deductions) will be increased by 0.9% on wages or self-employment income that exceeds $200,000 for single and qualifying head of household and widow(er) filers ($250,000 for married couples filing jointly).
  4. Higher hurdle for deducting medical expenses.  Currently, out-of-pocket medical costs only are deductible to the extent they exceed 7.5% of your adjusted gross income.  For 2013, that hurdle will rise to 10%. But if you’re 65 or older, that threshold remains frozen at 7.5% through 2016.  [Then it rises—with 2013’s 65-year-old then 68.]

And what do we get for our money?

  • Reduced access to medical care for seniors from reduced payments to doctors and hospitals by Medicare.
  • Reduced access to medical care for the rest of us from a shrinking doctor population.
  • Elevated health insurance premiums to pay for the tens of millions of Americans now covered by fiat.
  • Elevated health insurance premiums to pay for those who still don’t buy insurance until they’re already at the ER.
  • Elevated health insurance premiums to pay for pre-existing conditions which companies are required to cover at “no additional cost.”
  • Elevated insurance premiums to pay for coverage for grown adults on their parents’ policies until these adults are 26.
  • An insurance board that will tell your doctor and hospital what illnesses, injuries, and procedures for which they will reimbursed for treating you.

It’s a brave new world.