Progressives Voted for Higher Taxes But the Middle Class Foots the Bill

Welcome to the real world of the progressive socialist liberal lift Democrats. It's not lost on many of us that more the 60% of the wealth in this country is in the hands of progressive Democrats. They, of course, voted for Mr Obama and the socialists, twice, but now have to deal with the consequences.

I wonder how they will succeed in not paying their fair share of the tax burden? Realistically, the progressive Democrats have never carried their fair share of the tax burden, they have always found a way for others to pick up the tab. Has anyone ever heard of a progressive socialist Democrat politician that was middle class? I didn't think so.

Their motto has always been "do as I say not as I do" as they laugh all the way to the bank.

Slammed by New Taxes: Why You're Poorer Than You Think
Source: David Koeppel, "Slammed by New Taxes: Why You're Poorer Than You Think," Fiscal Times, December 19, 2013.

December 30, 2013

Recent tax law changes will hit the wealthiest Americans harder than others when they file their taxes in the next few months, thanks to new ObamaCare taxes and increases in overall tax rates and capital gains taxes, says the Fiscal Times.

The tax rate increases begin to kick in for couples earning $250,000 or individuals making $200,000 per year.  Several factors are making this year particularly painful: there are four major tax increases that went into effect this year, plus the end of Bush-era tax cuts reinstated phase-outs for itemized deductions and personal exemptions. Here are some of the new or higher taxes high-income earners will see this year:

• Additional Medicare tax regulations authorize an increase in Medicare tax by 0.9 percent, for married couples earning $250,000 or individuals at $200,000.

• The new Net Investment Income Tax (NIIT) imposes a 3.8 percent increase to investment income of "individuals, estates and trusts" and is triggered at the $250,000 or $200,000 threshold. Both of these taxes are being levied to help pay for the new health care law. The NIIT is not indexed for inflation.

• Tax on capital gains and dividends increased from 15 percent to 20 percent in 2013 for couples earning $450,000 or individuals earning $400,000, returning rates to Clinton-era levels.

• The top income tax bracket increased to 39.6 percent (from 35 percent in 2012) for married Americans making $450,000 or individuals making $400,000. Those taxpayers are also ineligible for the personal $3,900 exemption.

• A phase-out on personal exemptions caps how much high earners can deduct on their taxes. The phase-out limits exemptions for taxpayers who earn more than $300,000 (married filing jointly) or $250,000 (single) by 2 percent for each $2,500 earned above the threshold.

The increased capital gains tax could hit taxpayers particularly hard, given the record year seen by the stock market. U.S. mutual funds are disclosing capital gains distributions greater than many investors have seen since before the financial crisis.

• A Morgan Stanley analysis of a hypothetical couple earning $500,000 per year and $315,000 in investment income found that the couple's tax liability would increase from $183,000 in 2012 to $220,000 in 2013.
• That's a nearly 20 percent increase, some of which might be avoidable with additional tax planning.