- The Foundry: Conservative Policy News from The Heritage Foundation - http://blog.heritage.org -
Morning Bell: 13 Tax Increases in 2013
Posted By Curtis Dubay On January 8, 2013 @ 8:59 am In Obamacare | Comments Disabled
New Year’s Day was tough for taxpayers. Thirteen tax increases kicked in.
The deal that Congress and President Obama struck that finally—but only partially—avoided the fiscal cliff resulted in seven tax increases.
Those hikes combined with six tax increases from Obamacare that also began on New Year’s Day.
13 Tax Increases That Started January 1, 2013
Tax increases the fiscal cliff deal allowed:
1. Payroll Tax : increase in the Social Security portion of the payroll tax  from 4.2 percent to 6.2 percent for workers. This hits all Americans earning a paycheck—not just the “wealthy.” For example, The Wall Street Journal calculated that the “typical U.S. family earning $50,000 a year” will lose “an annual income boost of $1,000 .”
2. Top marginal tax rate: increase from 35 percent to 39.6 percent  for taxable incomes over $450,000 ($400,000 for single filers).
3. Phase out of personal exemptions for adjusted gross income (AGI) over $300,000 ($250,000 for single filers).
4. Phase down of itemized deductions for AGI over $300,000 ($250,000 for single filers).
5. Tax rates on investment: increase in the rate on dividends and capital gains  from 15 percent to 20 percent for taxable incomes over $450,000 ($400,000 for single filers).
6. Death tax: increase in the rate (on estates  larger than $5 million) from 35 percent to 40 percent.
7. Taxes on business investment: expiration of full expensing—the immediate deduction of capital purchases  by businesses.
Obamacare tax increases that took effect:
8. Another investment tax increase: 3.8 percent surtax on investment income  for taxpayers with taxable income exceeding $250,000 ($200,000 for singles).
9. Another payroll tax hike: 0.9 percent increase in the Hospital Insurance portion of the payroll tax  for incomes over $250,000 ($200,000 for single filers).
10. Medical device tax: 2.3 percent excise tax paid by medical device  manufacturers and importers on all their sales.
11. Reducing the income tax deduction for individuals’ medical expenses .
12. Elimination of the corporate income tax deduction for expenses related to the Medicare Part D subsidy .
Each of these 13 tax increases will slow the economy, meaning that businesses will create fewer jobs. Fewer jobs will make it even more difficult to land a job than it already is for the more than 12 million Americans looking for work.
President Obama demanded these higher taxes. Obama’s 2013 tax increases  increases, in Obamacare and through the fiscal cliff  deal, will not curb deficits and debt, because growing spending is driving America’s budget crisis. Congress needs to immediately turn its attention to the actual cause of our deficit and debt problem: too much spending. The proper way to address this problem is through reforms to entitlement programs .
President Obama promised the American people a “balanced approach” of tax increases and spending cuts to reduce deficits and debt. He has achieved the tax increase portion of that approach. Now Congress needs to force him to follow through on the spending cuts portion.
Article printed from The Foundry: Conservative Policy News from The Heritage Foundation: http://blog.heritage.org
URL to article: http://blog.heritage.org/2013/01/08/tax-changes-2013/
URLs in this post:
 Payroll Tax: http://www.heritage.org/issues/taxes/payroll-taxes
 Social Security portion of the payroll tax: http://www.heritage.org/research/reports/2012/06/what-is-payroll-tax-hike-four-basic-facts
 annual income boost of $1,000: http://blogs.wsj.com/economics/2013/01/01/payroll-tax-cut-expires-how-much-more-will-you-pay/
 35 percent to 39.6 percent: http://blog.heritage.org/2013/01/01/congressional-budget-office-shows-senate-bill-is-600-billion-tax-hike/
 dividends and capital gains: https://webmail.heritage.org/owa/redir.aspx?C=a9673a4ad24e44caabb08ac11a4ed28b&URL=http%3a%2f%2fwww.heritage.org%2fresearch%2freports%2f2012%2f07%2ftop-5-reasons-taxmageddon-is-destroying-jobs
 estates: http://www.heritage.org/research/reports/2010/07/the-economic-case-against-the-death-tax
 deduction of capital purchases: http://www.candidatebriefing.com/taxes/
 investment income: http://blog.heritage.org/2012/12/06/obamas-dirty-little-tax-secret-hes-already-raised-taxes-on-the-rich-chart/
 Hospital Insurance portion of the payroll tax: http://www.heritage.org/research/reports/2011/01/obamacare-and-new-taxes-destroying-jobs-and-the-economy
 medical device: http://blog.heritage.org/2012/12/18/medical-device-tax-is-latest-proof-that-taxes-matter/
 for individuals’ medical expenses: http://blog.heritage.org/2012/04/18/top-10-most-expensive-obamacare-taxes-and-fees/
 Medicare Part D subsidy: http://www.heritage.org/research/reports/2012/06/delaying-obamacare-tax-increases-key-part-of-stopping-taxmageddon
 income tax: http://www.heritage.org/issues/taxes
 Obama’s 2013 tax increases : http://blog.heritage.org/2012/12/15/tax-changes-2013
 fiscal cliff: http://www.heritage.org/issues/economy/fiscal-cliff
 through reforms to entitlement programs: http://www.heritage.org/research/reports/2012/11/six-bipartisan-entitlement-reforms-to-solve-the-real-fiscal-crisis-only-presidential-leadership-is-needed
 Image: http://www.morningbell.org
 record year: http://washingtonexaminer.com/article/2517801#.UOwf7azIl84
 counter influence of the gun lobby: http://usnews.nbcnews.com/_news/2013/01/08/16411165-gabby-giffords-launches-group-to-counter-gun-lobby?lite
 new, substantial national tax: http://dailycaller.com/2013/01/07/up-quick-harvard-public-health-docs-call-for-new-federal-tax-on-guns-ammunition-to-reduce-gun-violence/
 Unemployment across the eurozone: http://www.bbc.co.uk/news/business-20943292
 Tune in online: http://www.istook.com/
Copyright © 2011 The Heritage Foundation. All rights reserved.