With all the focus on the so called fiscal cliff centering just on the income tax rates for 2013, America is not realizing the magnitude of what is about to happen to middle income individuals. We will soon see an enormous tax increase that was arranged totally by Obama and the Democrats for those in the middle income range.
First, the payroll tax is going up by 2% of earned income. If you make $1000 per week, you will pay an additional $20 out of your weekly paycheck. That is $1,040 for the year.
Second, if your family has major medical expenses, the amount that you can deduct from your taxes is now limited to amounts that total more than 10% of total income versus the 7.5% level that currently applies. This tax increase is part of Obamacare. That same family earning $50,000 that has to pay $10,000 for home nursing services will now have to pay the tax on an additional $1250 of income. That will mean an increase of $312.50 in taxes for the year.
Third, a family with huge medical related expenses that do not get covered by insurance will no longer be able to use flex accounts to pay for these costs except for $2500 per year. This does not apply to too many folks, but the ones who will get hit will have major problems. For example, a family with a special needs child that attends a school devoted to such children will no longer be able to use pre-tax dollars to pay for tuition. Instead, that family will have to pay tax on the funds first and use what is left to pay the tuition. Obamacare limited these flex accounts to $2500 for the year. That same family with $50,000 of income with a child in a school for special needs children that cost $15,000 per year will have an increased tax bill of more than $3000 for 2013 on this basis alone.
Fourth, Obamacare is imposing a new medical device tax. This is going to increase the cost of medical care for things like pacemakers, replacement joints, and the like. One way or another, these costs will get passed through to everyone who has insurance as well as to those who don't.
Fifth, many small businesses are about to get hit with a Medicare/Obamacare tax increase of a little over 1% of profits. That does not sound like much, but in the aggregate, it will mean fewer jobs, less investment and slower growth. On top of this, consider the businesses that will be required to provide health insurance or to pay the fine for failure to do so. For businesses that already provide insurance, this may not be a big deal at first. Think, instead, about businesses that are barely staying open. These are places that are struggling to make a profit that would allow them to continue. The Obamacare tax that forces the cost of labor up by 5 or 10% for health insurance may be all that it takes to drive some of these place into bankruptcy. The job losses will be real and they will be substantial. For the most part, these losses will affect middle income people.
The list goes on, but this gives you a sense of the magnitude of what is coming. Don't get lost in the nonsensical fight over higher taxes for those making the big bucks. Remember that Obama has already raised taxes in a major way on almost all Americans. He deserves to be held accountable for that.
First, the payroll tax is going up by 2% of earned income. If you make $1000 per week, you will pay an additional $20 out of your weekly paycheck. That is $1,040 for the year.
Second, if your family has major medical expenses, the amount that you can deduct from your taxes is now limited to amounts that total more than 10% of total income versus the 7.5% level that currently applies. This tax increase is part of Obamacare. That same family earning $50,000 that has to pay $10,000 for home nursing services will now have to pay the tax on an additional $1250 of income. That will mean an increase of $312.50 in taxes for the year.
Third, a family with huge medical related expenses that do not get covered by insurance will no longer be able to use flex accounts to pay for these costs except for $2500 per year. This does not apply to too many folks, but the ones who will get hit will have major problems. For example, a family with a special needs child that attends a school devoted to such children will no longer be able to use pre-tax dollars to pay for tuition. Instead, that family will have to pay tax on the funds first and use what is left to pay the tuition. Obamacare limited these flex accounts to $2500 for the year. That same family with $50,000 of income with a child in a school for special needs children that cost $15,000 per year will have an increased tax bill of more than $3000 for 2013 on this basis alone.
Fourth, Obamacare is imposing a new medical device tax. This is going to increase the cost of medical care for things like pacemakers, replacement joints, and the like. One way or another, these costs will get passed through to everyone who has insurance as well as to those who don't.
Fifth, many small businesses are about to get hit with a Medicare/Obamacare tax increase of a little over 1% of profits. That does not sound like much, but in the aggregate, it will mean fewer jobs, less investment and slower growth. On top of this, consider the businesses that will be required to provide health insurance or to pay the fine for failure to do so. For businesses that already provide insurance, this may not be a big deal at first. Think, instead, about businesses that are barely staying open. These are places that are struggling to make a profit that would allow them to continue. The Obamacare tax that forces the cost of labor up by 5 or 10% for health insurance may be all that it takes to drive some of these place into bankruptcy. The job losses will be real and they will be substantial. For the most part, these losses will affect middle income people.
The list goes on, but this gives you a sense of the magnitude of what is coming. Don't get lost in the nonsensical fight over higher taxes for those making the big bucks. Remember that Obama has already raised taxes in a major way on almost all Americans. He deserves to be held accountable for that.
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