If I had $100 for every time I heard Barack Obama promise us that he would not raise taxes on middle class Americans, I could afford to take my family on a Hawaiian vacation.
Between the fiscal cliff resolution which wasn’t a resolution after all, and Obamacare, there are 13 new tax increases that will directly or indirectly impact everyone in America, including the middle and poverty class people.
Taxes with a direct impact on the middle and poverty class:
1. Right off the bat, the fiscal cliff agreement that would only raise taxes on the wealthy, just raised EVERYONE’S payroll Social Security tax by 2%. The old rate was 4.2%, but that was raised for everyone across the board to 6.2%. A family making a combined gross of $50,000 will pay an additional $1,000 in Social Security taxes. Right there Obama broke his promise and proved to the entire nation that he is a blatant liar and that his word can never be trusted. Not exactly a trait you want in your national bleeder, I mean leader.
2. Thanks to Obamacare, you will be hit with the medical device tax. This clever tax places a 2.3% excise tax on all qualifying medical devices, which will be paid by the manufacturer. That means that they will raise their prices in order to recover the increase taxes that they have to pay and that increase will float down the line until it hits you. What are some of the medical devices that qualify? Would you believe the protective gloves that every medical personnel in the US wears? Let’s not forget things like catheters, C-PaP machines, Oxygen masks, wheelchairs, and the list goes on and on and on. If you see any kind of doctor, dentist or whoever, you will be paying more.
3. Reduction is allowable medical expenses for tax deduction purposes. I remember a time when I actually got to deduct medical expenses on my income taxes, but every time Washington looks at ways to raise taxes, this always seems to be a favorite and it is again. If you thought it was difficult to incur enough medical bills to actually be able to use a portion of them as a deduction, get ready to see even less. They are making it almost impossible to have any useable medical deductions, unless you paid out tens of thousands of dollars, and then you might be able to deduct a few hundred dollars, if you’re lucky.
Taxes with an indirect impact on the middle and poverty class:
Before I start listing these other 10 tax increases that will impact you indirectly, let me ask a question or two? Who is it that supplies most of the jobs in America? Simple, it’s people with enough money to own and operate a business. What happens if you start taking money away from them? Simple again, they won’t be able to provide as many jobs for you and me. Any person with common sense can understand this basic business principle, but then who said the people in Washington have any common sense?
4. Income taxes for those individuals making $400,000 (families $450,000) will go from 35% to 39.6%. Add that to the 2% increase in Social Security taxes and these people will automatically be paying 6.6% more in taxes. On $400,000, that’s an increase of $26,400 a year. That’s the equivalent of one employee making $12.69 per hour working a standard 40 hour week. How do you think they are going to pay for those extra taxes? Yep, there goes at least two employees out the door because you have account for employer taxes and benefits, so that employee making $12.69 per hour actually costs the employer over $30,000 per year.
5. Thanks to Obamacare, people making $200,000 or families making $250,000 will be hit with a 0.9% payroll tax increase in the hospital insurance portion. That’s $1,800 for someone making just $200,000 or $3,600 for that person making $400,000 that we talked about earlier.
6. Personal exemptions used in calculating one’s adjusted gross income will be phased out for individuals making $250,000 or families making $300,000. I believe that’s about $3,800 per personal exemption or $7,600 for a married couple.
7. Itemized deductions are being reduced for people making $250,000 or families making $300,000. That’s going to cost them at least another $1,000 or more in taxes.
8. All you rich people are going to pay more for any dividend or capital gains. If you make $400,000 or your family makes $450,000, you will see your tax rate on dividends and capital gains go from 15% to 20%. All those stocks and properties you own just got more expensive, meaning there goes another employee or two.
9. How this one can be explained I haven’t a clue, but under Obamacare, anyone making $200,000 or families making $250,000 will have to pay a 3.8% surtax on all investment income.
10. The Death Tax. Many business empires have been able to endure because of being passed down from one family member to the next. But that’s not to be allowed in a socialistic government. So on any estates worth $5 million or more, the death tax will increase from 35% to 40%. Let’s put this into perspective. Say your family owns a business that is worth exactly $5 million and in today’s competitive market operates on a very thin profit margin. The principle owner dies and the business, which is part of the estate, is taxed under the death tax. The amount of taxes owed the government just went from $1.75 million to $2 million, an increase of $250,000. How many businesses today can afford to keep their doors open if they are forced to pay a death tax of $2 million? The tradition of family legacies will quickly become a thing of the past and many long time businesses will be forced to close their doors and put thousands of people out of a job.
11. Taxes on business investments will increase. The amount of deductions for business investments will not only decrease but may soon disappear altogether. So how many of you will want to invest in a company if you can’t get any type of deduction on your investment? How many companies are going to lose investors and end up going out of business? This is yet another means to reduce the so-called wealthy to the ranks of the middle and poverty class which is simple Marxist economics.
12. Corporations that have had a tax deduction to the Medicare Part D subsidy, will see that deduction go the way of the dodo bird. No more deduction which directly impacts the bottom line. Oops, there goes a few more employees out the door.
13. Health insurance companies enjoy a corporate tax deduction for the compensation they pay their executives. That deduction is going to be cut back somewhat which will impact the bottom line of the health insurance companies. So how do you expect them to make up that loss? In the health insurance business, everything trickles down to the bottom where it will either cost you more in premiums and/or a reduction in services covered.
When all is said and done, not only are all of us facing more taxes, but our bosses are facing a huge chunk of change. A business owner making $400,000 who is married, will looking at $40,000 to $50,000 in additional taxes in one form or another. That’s a 12.5 percent difference. I was in the business world for a number of years and I don’t know too many businesses that enjoy a 12.5% profit margin, especially in today’s economy.
Once Obama won re-election, we saw a number of businesses, large and small, start reducing the staff in preparation of all of the tax increase. Although most of those increases may not affect you directly, they are going to affect jobs and the nation’s economy. Thousands are already being laid off because of it and Obama and his cronies claim they don’t see how it will have a negative impact. But don’t forget, this is the guy who repeatedly promised that he wouldn’t raise taxes on middle class America.
I wonder how all of those Democrats who believed Obama’s lies are going to feel now as their paychecks shrink, their income taxes go up and they start losing their jobs? It’s their own fault!