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Taxes

Obamacare’s 18 New Tax Hikes

From The Heritage Foundation:

Not only did the President and his partners in Congress take $716 billion out of Medicare to pay for Obamacare, but they also raise taxes by $836.3 billion to pay for it, with $36.3 billion hitting Americans in 2013 alone. Here’s the Congressional Budget Office (CBO) and Joint Committee on Taxation‘s (JCT) updated cost of the Obamacare tax hikes and penalties.

To read about more of Obamacare’s negative effects, click here.

Government Will Take Almost Half Your Paycheck in 2013

From The Heritage Foundation:

How high is the marginal tax rate on each additional dollar the average American earns? In other words, if you got a raise of one dollar, how much of that dollar would be taxed away? These rates are already high, and they’re getting higher next year.

A middle-class taxpayer’s income is subject to a 25 percent federal income tax. Then there is the federal Social Security and Medicare payroll tax of 13.3 percent in 2012—5.65 percent of that is removed from the employee’s paycheck, and the remaining 7.65 percent is paid by the employer. (In reality, the employee pays the entire 13.3 percent, because the employer’s portion of the tax does not affect the cost of labor: The employer would pay the employee 7.65 percent more if there were no employer’s portion of the payroll tax.)

So the 25 percent federal income tax plus 13.3 Social Security and Medicare payroll taxes equals 38.3 percent going to federal taxes in 2012.

And then there are state taxes. According to the Tax Foundation, the average state’s income tax rate for the middle-class taxpayer is 4.82 percent, which brings the total to 43.12 percent in federal and state taxes. And it’s going higher, thanks to the nearly $500 billion in tax increases for 2013 that some have called Taxmageddon. In January of next year, the federal income tax rate for middle-class taxpayers is scheduled to rise from 25 percent to 28 percent, and the payroll tax is scheduled to rise from 13.3 percent to 15.3 percent. This drives the marginal tax rate based on the aforementioned three taxes to 48.12 percent. Add in state and local property, corporate, excise, and other state and local taxes, and the percentage of each additional dollar that is taxed hovers around 50 percent.

When half of each additional dollar earned is taxed away, taxpayers experience a disincentive to start businesses or expand existing ones. This leads to fewer jobs being created.

It is outrageous that any dollar earned by a middle-class taxpayer would go as much to taxes as to supporting the taxpayer’s family. The government didn’t earn the taxpayer’s paycheck and shouldn’t be entitled to it.

See the table below to see how your state compares to the national marginal tax rate of 43.1 percent in 2012 and 48.1 percent in 2013.

Hypocrisy Watch: Obama’s office staff owe $834K in back taxes

From RedState:

Note the term ‘office’ staff: I’m comfortable in assuming that the general White House staff – the cleaners, cooks, gardeners, handymen, and whatnot – are all careful to make sure that their taxes are paid up. If only because the President clearly won’t protect them. Anyway, Andrew Malcolm has the summary: 36 office staff members owe $833,900 in back taxes. Which, by the way, is only moderately more scandalous on a fiscal level than the fact that, in an economy where everybody else is forced to cut back on jobs, the White House staff has increased to be larger than George W Bush’s, in both personnel and budget terms.

It constantly amazes me – honestly, even after four* years of watching this – how incredibly tin-eared the President is when it comes to this sort of thing. Considering what we did to this administration over tax evasion in 2009… there should be a large sign above every entry security checkpoint in the White House (angled so that it can be only seen from the inside) saying PAY YOUR TAXES, YOU FOOLS. And if Barack Obama had the ability to find and keep a competent Chief of Staff, there might have been. Alas, he does not, and so there is not… and fish rot from the head down.

Read the rest at RedState.

Is Cain Able to Kill the Tax Code?

From Big Government:

Herman Cain is the only GOP presidential candidate who wants to kill the tax code. That’s right. Put a knife in it. Junk the entire system. And people are cheering as he rises in the polls in his quest for the nomination.

Cain’s 9-9-9 plan is not perfect. But then again, the good should never the enemy of the perfect.

Congressman Paul Ryan gives the plan a thumbs-up. Supply-side mentor Art Laffer tells me it would be “far, far better than the current system.” And Chris Chocola, president of the free-market Club for Growth, calls it “a truly revolutionary tax reform that would amount to a massive job-creating tax cut on investments, savings, and income.”

As the world now knows, 9-9-9 translates to a 9 percent income-tax rate, a 9 percent value-added net sales tax rate on business, and a 9 percent national sales tax overall. Like many conservatives, I am troubled by the national-sales-tax piece. It reminds me too much of Europe. It could start low and then build on top of the other taxes. But I totally support the first two nines on personal income and business. In my view, these are vast improvements.

For his part, Cain argues that the sales-tax nine would pick up revenue and help to lower the rate for everybody, especially the middle class. His economic adviser Rich Lowrie told me in a CNBC interview that the sales tax is a replacement tax, not an add-on tax like you’d find at the state level. This is a key point. Lowrie said, “All we are doing is pulling out taxes that are invisible. We’re cutting the rates. We’re putting them back in at lower rates.”

Read the rest at  Big Government.

Sen. Banks to Chair Taxpayer Protection Caucus

From HoosierAccess:

Today it was announced that Sen. Jim Banks (R-Columbia City) will be leading the newly formed Indiana Taxpayer Protection Caucus, a project of Americans for Tax Reform. ATR has worked to establish taxpayer protection caucuses in state legislatures around the country.

“Jim Banks is a true fiscal conservative and will serve as an essential proponent for Indiana taxpayers in this leadership role,” said Joshua Culling, Indiana state affairs manager for Americans for Tax Reform. “We couldn’t be happier that Sen. Banks has agreed to chair the Indiana Senate Taxpayer Protection Caucus as an advocate of lower taxes and limited government policies that will help Indiana families and businesses through private sector-led job creation and economic growth.”

Other Senate members of the Indiana Taxpayer Protection Caucus include Jim Buck (R), Mike Delph (R), Dennis Kruse (R), Jim Tomes (R), Greg Walker (R), and John Waterman (R).

Want To Be Taxed For How Much You Drive?

From Wrap Your Head Around:

As if gas prices weren’t high enough, The Hill is reporting that the government is thinking about taxing drivers based on how many miles they drive. Isn’t that just great?

The Congressional Budget Office suggested that the cars could be tracked with an electronic device telling how many miles you drive. No doubt it will also track your location. If our smart phones can do it when we take pictures, you bet this device will do it.

This proposal is just another ridiculous attempt to control our lives. My husband works an hour away from home and is already paying a fortune in gas. The last thing we need is to be taxed on top of it. How many people are going to have to relocate just so they can afford to get to their jobs? It reminds me of Lois Lowry’s The Giver, where everyone lives in their own little communities with no access to and little knowledge of surrounding communities because they all ride bicycles because their not allowed to drive because their whole lives are regulated!

The best part is that even though the plans is “part of the administration’s Transportation Opportunities Act,” there’s this nice little disclaimer with it:

“This is not an administration proposal,” White House spokeswoman Jennifer Psaki said. “This is not a bill supported by the administration. This was an early working draft proposal that was never formally circulated within the administration, does not take into account the advice of the president’s senior advisers, economic team or Cabinet officials, and does not represent the views of the president.”

Of course, the president can’t be blamed for this. No way. He doesn’t want us to have to pay a nickel more for gas—that’s what he keeps saying, isn’t it? Even though all his ridiculous regulations are causing gas prices to go up. When is the government going to get it? We want you out of our personal lives—and that includes our cars!

White House Puts Out Feelers on the Transportation Opportunities Act

From RedState via The Hill:

The Obama administration has floated a transportation authorization bill that would require the study and implementation of a plan to tax automobile drivers based on how many miles they drive.

It’s called the Transportation Opportunities Act, which is very ironic because I’m not sure of one opportunity that this would provide for the middle class Obama seems to keen on assisting. If you think for half a second you’ll quickly realize that we pay gas taxes every time we fill up our cars. For example, this chart.

Yes, Connecticut, you’re already spending over $.70/gallon on taxes. In a 16 gallon tank, that’s $11.20 going to the government every time you fill up. This already serves the purpose of taxing people on how much they drive. No, it’s not as accurate as, say, monitoring the mileage of every vehicle and taxing them based on how much they actually drive. The logistics of implementing a system that tracks the mileage of every car owner to monitor road use are mind boggling, not to mention a direct infringement on the rights of drivers. They seem to know that Americans will not accept this sort of violation, which is why they’re ready to wage the PR campaign:

The administration seems to be aware of the need to prepare the public for what would likely be a controversial change to the way highway funds are collected. For example, the office is called on to serve a public-relations function, as the draft says it should “increase public awareness regarding the need for an alternative funding source for surface transportation programs and provide information on possible approaches.”

The administration is denying that it’s an official proposal, claiming that it isn’t so much a proposal as an early draft, and that it was never approved. What it feels like is a way for them to get people used to the idea and start warming us up to their intent.

It’s unwise to put anything past this administration in regards to raising taxes. It may seem far fetched, but it’s not necessarily a new tax idea, and has been floated at the state level in several states, including Illinois and North Carolina. They will likely cloak it in green and sell it as the responsibilty of the motorist to pay their “fair share”.

The question is, does the White House believe that everyone who owns a car is “rich”? It seems a little more than probable that the majority of motor vehicle owners fall well below President Obama’s $250k threshhold.

At this point, it appears our President is actively working to destroy the middle class he’s been preaching about rescuing.

Income Tax Burdens in Perspective

From National Review:

Here is a chart that shows how much income taxes are paid by each income tax group:

As you can see, the top-earning 1 percent of Americans (the 1.4 million returns making more than $380,000) paid 38 percent of federal personal income taxes while the Americans in the lower half of the income spectrum (or 70.0 million returns) paid 2.7 percent of the total. This chart also shows that roughly half of taxpayers pay for almost all of federal personal income taxes.

Based on this data, it is hard to say that top income earners are taxed unfairly lightly.

More importantly, the people in the top are not always the same year after year. This week, E. J. Dionne’s Washington Post column quoted an author as saying:

“The effective rate for the top 400 taxpayers has gone from 30 cents on the dollar in 1993 to 22 cents at the end of the Clinton years to 16.6 cents under Bush,” he said in a telephone interview. “So their effective rate has gone down more than 40 percent.”

In fact, the top 400 aren’t a static group. There’s lots of income mobility in and out of the “top 400″ every year, and most of their income is due to highly fluctuating capital gains (which are taxed lower than ordinary income). IRS data for the top 400 over a 15-year period shows that 72 percent of them appeared only once. A little more than 12 percent appeared twice, and a little over 15 percent appeared three times or more. Trying to fine-tune tax policy to attack the “top 400″ will only tax different people tomorrow than are there today.

The Truth About the 2001-2003 Tax Cuts

From The Heritage Foundation:

In the battle over the extension of the 2001/2003 tax cuts, a lot of myths about the tax cuts are being perpetuated. One of the common myths is that the Bush tax cuts disproportionately favored the wealthy, shifted the burden of taxes from the rich to the middle class, and made our tax system less progressive than most wealthy nations.

First, although there was a slight shift of burden to the middle class immediately after the 2001 tax cuts were passed, as the higher earners (and businesses) grew their savings, investments, and wage funds, their share of the tax burden rose. By 2007, the highest earners were paying a significantly larger share than they had previously, and today the tax burden of top 1 percent exceeds that of bottom 95 percent.

Does that sound unusually progressive? Well, it is. The U.S. federal tax system is more progressive than any other OECD country, by several measures. (And if you count state taxes in the U.S. and the corresponding value added tax in the European countries, it would only increase this difference). It isn’t only that the wealthy in America pay more taxes because they earn more money. Compared to the relative income they earn, the top 10 percent pay a higher relative share of taxes than their European counterparts.

Read the rest at The Heritage Foundation.

Are the Feds Trying to Nationalize Your Retirement Savings?

From Power Line:

For some time, there have been rumblings that the federal government might try to solve its budgetary problems by nationalizing (i.e., stealing) the money that millions of Americans have set aside for retirement in 401(k) plans and the like. One way they might do this is to confiscate the cash on hand in exchange for a promise to make future payments in the form of an “annuity.” An involuntary annuity, in that scenario.

I haven’t taken this speculation too seriously, mostly because the core of the Democratic Party consists of lawyers, and a lawyer’s most precious possession is his 401(k) account. One of those who have taken the threat more seriously is Congresswoman Michele Bachmann, who co-authored a letter warning the Obama administration against any attempt to confiscate Americans’ retirement savings. You can read the letter here. It says, in part:

In the Annual Report of the White House Task Force on the Middle Class, Vice President Biden discussed at length the creation of so-called “Guaranteed Retirement Accounts (GRAs)” which would provide protection from “inflation and market risk” and potentially “guarantee a specified real return above the rate of inflation” — presumably at taxpayer expense. …

The Vice President’s comments are troubling, insofar as they come on the heels of testimony before Congress from supporters of GRAs proposing to eliminate the favorable tax treatment currently afforded to 401(k) plans, and instead use those dollars to fund government-invested GRAs into which all employees would be required to contribute a portion of their salary — again, with a government subsidy. These advocates would, essentially, dismantle the present private-sector 401(k) system, replacing it instead with a government-run investment plan, the size and scope of which remain to be seen.

Read the rest at Power Line.

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