Thursday, January 03, 2013
Best Explanation of tax cuts and increases I have found
Nope, I surely am not Einstein and when a number or the word tax is in a sentence. My brain spasms. CNN explained last evening why EVERYONE was going to see some kind of tax increase. I did not get it as I thought the president ensured 99% would not. What I was not understanding was the PAYROLL tax for those who are working. I prefer to call a "holiday" and it was in place for only two years by Obama. The PAYROLL tax is different from the rest of the tax increases where those making under 400,000 will NOT see an increase at all but if you are rich you will. As I understand it the Payroll Tax was ONLY a TWO year holiday anyway. NOTE BENE: Payroll taxes SUPPORT Social Security!. Everyone especially the middle class and working class SHOULD want that if you want any kind of retirement short of the street.
The following is in the publication "The Blaze." I thought it the best explanation yet of the fiscal cliff deal. This is how they explain it for those whose synapses are short circuiting about the dry subject of taxes:
“For most people, [the increase for wage earners] is just the payroll tax,” said Roberton Williams, a senior fellow at the Tax Policy Center.
The tax increases could be a lot higher. A huge package of tax cuts first enacted under President George W. Bush was scheduled to expire Tuesday as part of the “fiscal cliff.” The Bush-era tax cuts lowered taxes for families at every income level, reduced investment taxes and the estate tax, and enhanced a number of tax credits, including a $1,000-per-child credit.
The package passed Tuesday by the Senate and House extends most the Bush-era tax cuts for individuals making less than $400,000 and married couples making less than $450,000.
Obama said the deal “protects 98 percent of Americans and 97 percent of small business owners from a middle-class tax hike. While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country.”
The income threshold covers more than 99 percent of all households, exceeding Obama’s claim, according to the Tax Policy Center. However, the increase in payroll taxes will hit nearly every wage earner.
Social Security is financed by a 12.4 percent tax on wages (payroll) up to $113,700, with employers paying half and workers paying the other half. Obama and Congress reduced the share paid by workers from 6.2 percent to 4.2 percent for 2011 and 2012, saving a typical family about $1,000 a year.
***Obama pushed hard to enact the payroll tax cut for 2011 and to extend it through 2012. But it was never fully embraced by either party, and this time around, there was general agreement to let it expire.
The new tax package would increase the income tax rate from 35 percent to 39.6 percent on income above $400,000 for individuals and $450,000 for married couples. Investment taxes would increase for people who fall in the new top tax bracket.
High-income families will also pay higher taxes this year as part of Obama’s 2010 health care law. As part of that law, a new 3.8 percent tax is being imposed on investment income for individuals making more than $200,000 a year and couples making more than $250,000.
Together, the new tax package and Obama’s health care law will produce significant tax increases for many high-income families.
For 2013, households making between $500,000 and $1 million would get an average tax increase of $14,812, according to the Tax Policy Center analysis. Households making more than $1 million would get an average tax increase of $170,341. [THEY SHOULD!]
“If you’re rich, you’re almost certain to get a big tax increase,” Williams said. [I SAY GOOD and remember to separate the PAYROLL TAX from everything else!]
IT IS CLEAR WHY THE DEMOCRATIC PARTY SHOULD BE SUPPORTED AND WHY WE MUST ELECT DEMOCRATS ACROSS THE BOARD. THE REPUBLICAN PARTY IS NOT ABOUT MOST ANYONE EXCEPT THE TOP 2% IN WEALTH! AND THEY DO NOT NOT NOT CREATE JOBS. THEY SINK AN ECONOMY AS THEY DID DURING THE PAST 30 YEARS!!