Skip to comments.New Payroll Tax About to Be Hiked for Second Time
Posted on 01/11/2010 10:12:35 AM PST by Behind Liberal Lines
the new Medicare payroll tax hasn't even become law yet, and it's already on its way to being hiked for the second time. The tax was set at 0.5 percent in the orginal Senate bill, and then got raised to 0.9 percent in Harry Reid's final version that passed the Senate. And now the NYT tells us, its going to rise once again.
This would actually follow the historical pattern of payroll taxes. The Social Security tax has been raised 20 times since first being implemented in 1935, from 1 percent to 6.2 percent, while the Medicare tax has gone up seven times since 1966, from .35 percent to 1.45 percent. Taking into account that employers must match the payroll tax contributions of their employees, the combined tax went from 2 percent when introduced in 1935, to 15.3 percent today.
During the campaign, Obama introduced the idea of a payroll tax on higher income earners -- but it was only to apply to those making over $250,000, and the point was to extend the life of Social Security. Not only does the new payroll tax apply to individuals earning more than $200,000, it imposes a marriage penalty by applying to couples with combined income of $250, 000 or more. Furthermore, instead of using the money to extend the solvency of Social Security, it will be funneled into a new entitlement program. Thus, revenue generated is no longer available to plug the gap in entitlements.
(Excerpt) Read more at spectator.org ...
They are completely INSANE! This will further depress economic activity and punish hard work. Damn Marxists are destroying this country!
They will keep shoving this crap down our throats until there is open revolt.
I noticed Friday my paycheck was a couple of dollars less. I thought Obama promised not to raise taxes on those of us making under $250K. I am WAY under that amount. Joe Wilson was right.
The list, ping
Time for some Tea Party and RNC types to get the message out to the people - 39% top rate + 15% social security + 6% medicare = 60% tax rate...that kills jobs.
I started my civil disobedience with last weeks paycheck. Hubby left his alone and we’ll pay next year, but they’ll get what’s due on tax day and not a day before.
I explained that to a fellow co-worker.
I said “that’s called a ‘tax cut’ when democrats are in power”.
“If you pay taxes, your withholding is cut... and if you don’t pay taxes, you get money back.”
If you under withhold too much, you can be charged a penalty.
As a life-long bookkeeper- this is a nightmare to perform payroll tasks.
If I am preparing a paycheck for an employee-—I NEVER have any information about the spouse’s income. Now we have “spouses’ which are not even opposite sex.
If there is to be some sort of sur-tax on the combined income of 2 married persons- are their respective employers supposed to make sure that they combine all their separate information ? The employer is required to match all the FICA & Medicare money deducted.
I see this as a complete invasion of privacy. It will be a total nightmare- with employers getting fined for not correctly preparing a payroll.
No wonder no one wants to put a toe into the water of hiring any new employees.
mm mm mmmm
While I agree that raising taxes kills jobs, I question your figures. Self-employed individuals do not get taxed on the “employer” portion of the 15% social security tax. And medicare is not 6%, it is 1.45%. The top tax rate of 39% does not apply to entire income, the tax tables are tiered rates. Before you use a 60% tax burden in an argument with a liberal, perhaps brushing up on the with-holding tax calculations would be beneficial.
I stand corrected - I was using a comment by Bob Brinker on Money Talk and forgot that part of his 6% number was state taxes. Now the IRS does have this data “The self-employment tax rate is 15.3%. The rate consists of two parts: 12.4% for social security (old-age, survivors, and disability insurance) and 2.9% for Medicare (hospital insurance).” This plus if you are in the Top bracket - 140K (?) then it is now 39% and we are at 54.3% That seems like a lot to me - how about you?
Agreed, it’s a lot. I was self employed for ten years. Writing a five figure quarterly check to the federal pig gave me migraines. And state tax was 6% at the time. A taxpayer filing single with no exemptions and making a 6 figure income or more, well, those migraines must be tenfold.