Skip to comments.Piecing Together a Tax Planís Effects (we've been had)
Posted on 01/04/2013 5:45:25 PM PST by Praxeologue
It is tempting for people who earn less than $400,000 to think that they got off easy this week under the tax deal to end the fiscal impasse, given that only those with incomes above that level will be in a higher income tax bracket in 2013.
But the legislation that both houses of Congress have now approved could increase taxes on people with incomes that are not quite that high as well. Thats because the bill includes language that begins to do what both President Obama and Mitt Romney proposed at various points in the past: Limit certain tax breaks available to people who are affluent.
The new rules target two tax breaks: personal exemptions and many popular deductions like those for state and local taxes, mortgage interest and charitable contributions. For both breaks, single people with at least $250,000 in adjusted gross income and married people filing jointly with at least $300,000 in income are vulnerable. A hypothetical Texas couple could end up paying about $2,500 more in taxes, for instance. ...
(Excerpt) Read more at nytimes.com ...
Taxpayers in red states earning between $250,00 and $450,000 will be hit four times as hard by this week's bill as taxpayers in blue states.
The reason, blue state taxpayers (eg NY) are already subject to high AMT due to high state and property taxes. Red state taxpayers (eg Texas) pay much lower or no state and property taxes, are less likely to be subject to AMT.
Therefore, this week's bill will disproportionately affect red state taxpayers, to the tune of $150 billion over ten years.
In other words, we've been had.
not a news flash for many of us
Your link is to a discussion of the cliff itself.
My observation is that this week's bill raise taxes four time as much in red states as it does in blue states for $250,000 through $450,000 earners.
That should be read as Republicans getting hit four times as hard as Democrats.
The reason is higher state income taxes and property taxes in blue states. Blue state residents are already subject to high AMT, while this bill captures the red staters who escape the AMT.
look at the post in particular. it’s a table showing the percent increase by income level.. just due to the new tax levels
I get a kick out of Obama supporters and Occutard wallstreet, you’d think their underlings would realize that all of their leaders are rich, trust fund, silver spoon sucking elites who have no other goal than to attain more power so as to retain and grow their own wealth, the Democrats hate the poor as much as they hate the middle class, fools!
I have a friend - quite affluent friend - paying about $75,000 Per YEAR in property taxes. . . and that will not stop when he retires. Even if his home is paid off.
I meant to say lower or no state income tax or lower property taxes, relative to NY, for example, where property values are high.
Only if you believed all the Republican sources that claimed that taxes would have stayed the same if nothing was passed.
All the rates were going up if nothing was passed, in fact technically this was a tax cut as of Jan 1. Yes, a 100% tax cut.
You know why the final bill sucked with all that crap in it?? because too many believed that if Plan B was killed no taxes would go up. So Reid wrote the final bill when plan B died.
Here’s some proof this guy is lying:
Notice not a single Republican is calling for the Repeal of this tax bill?
Come on, repeal it and see what happens? Do taxes go down as a result?
No one runs against Bohner and no one calls for this bills repeal. Shows you why its a losing hand.
The bill is not bad for Repubs - why would you want to repeal it ? It wouldn’t affect your taxes anyway unless you make more the $400K.
The payroll tax break was going to expire - I don’t believe it was part of the Bush tax cuts.
Obama got that temporary 1 year FICA/SS/payroll tax cut Dec 2010 as part of the 2 year Bush tax cut extension and then a year ago Dec 2011 O beat House Rs into submission extending it for one more year till now,
having been re-elected O doesnt need it anymore and the libs dont want it, so it just goes away.
“having been re-elected O doesnt need it anymore and the libs dont want it, so it just goes away.”
so my statement is correct - Obama raised taxes on the poorest of Americans as well as the middle class.
So on March 1st the mirror opposite occurs: discretionary expenditures go down unless a bill is passed. This is when the Republicans can hit a home run for us all by refusing to budge. This is when those Tea Partiers who are now silent, as you note, can prove their mettle. I fear the result will be the same, however: an unholy alliance of Dems and Rinos.
I been posting to let those automatic spending cuts go into effect all year but naturally we got a bunch of Republicans including many here dramatic whining about half the cuts demanding they be repealed (???), led by Ryan ironically who called the same 2011 bill historic.
Of course they should let them go, The bloated Fed government will never miss it.
But I will add that Bohner was put into an impossible situation on the taxes. Success was defined (by ‘always wrong Rush’ and CO) in way that was impossible to achieve : forcing Reid and O to extend all the tax cuts after they won the election, and with most Americans going to blame Bohner if they all went up.
In fact the ‘dont pass nuthin’ crowd was not even honest in their arguments.
I guess you could look at it that way. Are there any Rs in a position to exploit that? None of them called for extending it.
I think because many of the 47% have to pay this tax,
Now, with the tax increase sequester gone, the House only needs to worry about the expense reduction sequester, which is an easy one for the Republicans. Let them go over the cliff with it. The House can always vote emergency funds for defense from time to time. The net result would be $3 trillion of cuts over ten years versus $600 billion of tax increases, a 5:1 ratio.
Since Ryan/Romney was making a fuss about the military cuts being bad, lots of freepers here were repeating that, not all of us obviously.
So I would point out that military spending $500B to $700B depending on what you count can easily use a reduction.
So I get the argument back that the way these cuts that spending is terrible, because its across the board instead of targeted.
So I reply that congressional Rs had well over a year to replace it with sensible cuts, but had no interest in doing it.
So let them go. It requires no vote and no negotiation. Just like you say. Let O trade something to restore them if he wants to.
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