Despite Deal, Taxes to Rise for Most Americans

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Social Security is financed by a 12.4 percent tax on wages up to $113,700, with employers paying half and workers paying the other half. Obama and Congress reduced the share paid by workers from 6.2 percent to 4.2 percent for 2011 and 2012, saving a typical family about $1,000 a year.

Obama pushed hard to enact the payroll tax cut for 2011 and to extend it through 2012. But it was never fully embraced by either party, and this time around, there was general agreement to let it expire.

The new tax package would increase the income tax rate from 35 percent to 39.6 percent on income above $400,000 for individuals and $450,000 for married couples. Investment taxes would increase for people who fall in the new top tax bracket.

High-income families will also pay higher taxes this year as part of Obama’s 2010 health care law. As part of that law, a new 3.8 percent tax is being imposed on investment income for individuals making more than $200,000 a year and couples making more than $250,000.

Together, the new tax package and Obama’s health care law will produce significant tax increases for many high-income families.

For 2013, households making between $500,000 and $1 million would get an average tax increase of $14,812, according to the Tax Policy Center analysis. Households making more than $1 million would get an average tax increase of $170,341.

“If you’re rich, you’re almost certain to get a big tax increase,” Williams said.

(Photo: AP)

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2 thoughts on “Despite Deal, Taxes to Rise for Most Americans

  1. Love it or hate it Taxes are going up even more than that. Why doesn’t anyone ever ask the question of why our tax code is so complicated. Why does our income get taxed at the federal level. Then we pay taxes again on the money that we have just been taxed on with state sales and income tax.
    I recommend a flat tax. This way we know how much money is being taken from us. Instead of the government hiding the actuall tax burden with layers of taxes.
    Also I strongley recommend that the government only spend what they collect and make it illegal to spend more.
    If I ran my home on the governemt standard the bank would come and take my car and home and I would be living on the street. So I ask you, where do we live when the debters come for america.

    I am a free man not a slave, serf, or peasent, but a citizen of the United States of America

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