Fiscal Cliff Deal – 77 Percent Of All Americans Set To Pay More Taxes

Fiscal Cliff Deal

The President has claimed that the Tuesday night fiscal cliff deal will reduce middle class taxes in America. However, taxes for most Americans will increase in 2013. The tax relief that has been built into the package will add nearly $4 trillion per year for the next 10 years to the existing $16 trillion debt. The fiscal cliff deal passed by the Senate and the Congress will not stop the Social Security payroll tax cut from expiring. This means that more than 75 percent of American households will face a higher federal tax liability in 2013.

President Barack Obama signs the executive ord...
President Barack Obama signs the executive order creating the Middle Class Task Force at the White House. (Photo credit: Wikipedia)

Tax Policy Center’s analysis indicates that families with annual income between $40,000 and $50,000 will have to pay $579 extra middle class taxes in 2013. For those earning between $50,000 and $75,000, the liability will increase by $822. Individuals earning more will have to shell out higher taxes. The Bush era tax rates for individuals earning less than $400,000 and couples earning less than $450,000 have been extended. Those earning more will pay tax at a higher rate.

The highest tax rate will increase from 35 percent to 39.6 percent. Those who fall in the highest tax bracket will have to pay a higher rate of investment taxes at 20 percent. Obama’s health care law could also increase the tax outflow of high income families. Investments of individuals earning more than $200,000 per year and couples earning more than $230,000 per year will attract a new 3.8 percent tax.

According to Tax Policy Center, families with annual income between $500,000 and $1 million will have to pay $14,812 extra tax in 2013. Those earning more than $1 million will have to shell out an additional $170,341. Obama tried very hard to include the payroll tax cut for 2011 and wanted to extend it through 2012. However, Democrats and Republicans were not keen and both agreed to let the cut expire.

Wages as high as $113,700 pay a 12.4 percent Social Security tax. Employers pay half and workers pay the other half. The latter’s share was cut from 6.2 percent to 4.2 percent for 2011 and 2012. This will result in middle class taxes savings of about $1000 a year.

The fiscal cliff Congressional battles have just begun. Over the next few weeks, fiscal cliff agreements relating to debt ceiling and automatic spending cuts affecting the Pentagon will be hammered out. Democrats will continue to push for tax hikes while Republicans will demand spending cuts and entitlement reforms.

Tax Carnival Ecstasy – October 4, 2012

Mitt Romney at one of his presidential campaig...
Mitt Romney at one of his presidential campaign rallies. (Photo credit: Wikipedia)

Welcome to the October 4, 2012 edition of Tax Carnival Ecstasy. In this edition we have some very good articles including the first one by David de Souza on How Do Your Tax Credits Compare With The Rest Of The UK? Anisha at Nerdwallet.com takes a look at Tax-Advantaged Savings Vehicles. How will Mitt Romney handle The Debt Ceiling Deal? Bill Smith has a post for your consideration. And finally Edward Webber examines Which Countries Have The Highest Tax Rates. Hope you enjoy the articles, bookmark, share, tweet, like on Facebook and come back soon.

credits

Samantha Savory presents Let the (Budgeted) Fall Shopping Season Begin! | Miss Money Bee posted at Miss Money Bee, saying, “Temperatures are getting lower and soon the leaves will start changing, which can only mean one thing: Fall is nearly here! For most people, the fall season brings pumpkins, cozy sweaters and cool nights to mind. For others, it signals the time to put away their summer wardrobe and prepare for sweater dresses and boots. After you get done with the task of packing away your favorite tank tops and shorts, you might find that last year’s threads are worn or damaged.”

David de Souza
presents How Do Your Tax Credits Compare With The Rest Of The UK? posted at Tax Credits, saying, “This blog post shows which areas of the UK recieve the most tax credits, with London top of the table at over 5,200 pounds.”

filing

Bill Smith presents TurboTax 2012 Program posted at 2012 Tax – Free Tax Filing Options, saying, “Turbo tax is a company that specializes in filing taxes. You can file your 2012 tax with them relatively easy.”

Bill Smith
presents Impressive Free TurboTax posted at 2012 Taxes – Free Tax Filing Options, saying, “Free TurboTax is a very easy way of getting taxes prepared and filed ready for submission. It is an ideal way for businesses and individuals to file their taxes.”

retirement

[email protected] presents How to Save on Tax? Tax-Advantaged Savings Vehicles posted at NerdWallet, saying, “Get expert opinions on popular tax-advantaged retirement savings vehicles and factors to consider.”

taxes

Bill Smith presents Mitt Romney and The Debt Ceiling Deal posted at 2011 Taxes, saying, “Mitt Romney called the deal between the White House and the congressional Republicans “a mistake”. He went on to say that the deal would cut our defense budget badly.”

Edward Webber
presents Which Countries Have The Highest Tax Rates posted at TaxFix, saying, “If you think you are paying a high amount of tax, you should compare the tax rates of some of the other countries in the world.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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tax carnival ecstasy, blog carnival.

 

CEOs Press Congress And Obama For Lower Taxes And Smarter Regulation

Dozens of CEOs freshly out of their meeting with the Blue Dog Coalition have worked through a Business Roundtable lobbying meeting to reveal their proposals for boosting the economy today.

Their plan, known as Taking Action for America, is calling for a balanced federal budget, reform of regulations at the federal level and a lower tax rate for corporations that would use a territorial tax system as well as other changes.

President of Roundtable, former governor of Michigan, John Engler (R) and the contingent of CEOs met with President Obama Tuesday evening and are scheduled to meet with Timothy Geithner, Treasury Secretary today.

Jim McNerney is chairman of Roundtable as well as CEO of the Boeing Co. and says the purpose of the meetings is to focus on re-energizing the economy that has been slow in growth in order to put Americans back to work.

According to McNerney, the country cannot be successful in attempts to repair the economy if businesses and the government remain divided, and as long as the government remains divided due to partisan politics.  McNerney says that the changes should not wait until after the elections in November to act on these proposals, including lower taxes.

Dow Chemical Co. president and CEO, Andrew Liveris, says that the country cannot afford inaction from the nation’s capitol.

Members of the Roundtable, who are CEOs of the nation’s largest corporations, stress that smart regulation does not mean doing away with all regulations.  However, the group has identified some of the regulations considered costly to businesses and overly complex.

President and CEO of Procter & Gamble, Bob McDonald chairs the tax and fiscal policy committee of Roundtable and claims that the US corporate tax will be highest in the world within the next three weeks as Japan chooses to lower its rate.  Obama has recently released a proposal to lower the corporate tax rate from 35% to 28%.  The CEOs however are pushing for lowering the rate to 25%.

McDonald says that it is time to stop the talks and get something done.

Planning For Tax Changes

Potential changes in the tax laws proposed by President Obama mean that right now is a great time to start budgeting for your 2012 taxes.  One major change will be a change for those in the highest tax bracket from fifteen to nearly forty percent as part of sweeping increases in taxes collected from high-income individuals in the next ten years.

The plan calls for high taxes on earnings from dividends, a departure from earlier policies that protected earnings on this type of income.  The White House feels that the system for taxing investment earnings is one of the most unbalanced part of the current tax code, and this measure is one step to help fix the issue.

For those planning for their 2012 taxes, this means that individuals and couples need to begin looking at their investment income from previous tax years and determining whether they will be subject to these increased tax rates.  Setting aside additional money from a monthly or yearly budget to cover this potential tax increase is the best way to offset the effect of higher rates without suffering tax-time shock.

The overall goal of President Obama’s tax changes is to reduce the federal budget deficit that has plagued the US during this economic downturn.  While this change is not expected to eliminate the deficit entirely, it is part of a long term plan to use tax money from wealthy Americans to reduce the tax burden on lower income workers while still raising needed revenue.

Interesting Facts On Taxes

Mr. President, the problem lies with Government Spending and not taxes.

If you saw President Obama’s 2013 budget estimates, then you probably know that he plans to raise 1.5 trillion dollars by increasing taxes for the rich.

It seems the Obama administration believes in taking people for a ride. They think that if they tell a lie over and over again, it becomes a fact. Nowadays, the president and his leftist cabal spend the whole day talking about how rates for the rich are too low.

Anyone who thinks tax rates for any group of people is too low has been brainwashed. The fact is that taxes in the U.S. are too high.

Government spending is at an all time high. Taxes do not matter. The government can rise rates on 2012 taxes but still end up with a deficit.

Like any other addict, the government needs rehab because of its addiction to spending.

Americans pay less taxes than Europeans, yet these countries, with their exorbitant tax rates, are broke.

Yet the president continues to claim that tax rates for the rich are too low in every speech he makes.

According to U.S. laws, when the CEO of a company lies to investors, he can go to jail because of committing fraud.

Yet the president continues to spread lies to innocent taxpayers. He justifies his opinion by stating the fact that the top 1 percent of income earners are very rich and yet they pay the lowest tax rate. While this may be true it does not justify increasing rates on 2012 taxes for the rich.