Wednesday, April 16, 2014

The taxman cometh — with hand in your pocket

From page A1 | January 18, 2013 | 17 Comments

StateTax chart

Between the new budget agreement signed into law on Jan. 2 by President Obama and all the new taxes associated with Obamacare, Americans are facing a whole rash of additional taxes this year despite promises to the contrary.

According to the budget agreement, income tax rates will remain the same for most people. However 77 percent of Americans will be affected by the rise in payroll taxes that will increase from 4.2 to 6.2 percent this year on all earned income up to $113,700. That means a smaller take-home check for most.

At the same time, Congress granted a five-year extension of tax breaks for lower-income families, including the child tax credits and earned-income tax credit. Those credits eliminate income tax liability for many lower-income families.

The budget deal also restored unemployment benefits for those who have already used up their 26 weeks but remain unemployed. The agreement allows them to receive additional benefits for up to 47 weeks.

However, while income taxes remained the same for lower and middle class Americans, they will rise for high income households. The increases will be in the form of more limits on the amount of income people can shelter from federal taxation, a rise in the top marginal tax rate from 35 to 39.6 percent, plus the new tax rate for capital gains and dividends will rise from 15 to 20 percent.

Changes were also made to the estate tax, which primarily benefits wealthy Americans with more than $5 million to pass on to their heirs. An inheritance above that amount will be taxed at a rate of 40 percent rather than 35 percent.

Part of the debate during budget negotiations was to ensure that the wealthy pay their “fair share” of taxes. However, the top 20 percent of earners already supply 68 percent of all federal income tax revenue, according to a Congressional Budget Office study done in 2009.

Further, since the budget agreement was signed, Democratic leaders have said they want to raise as much as $1 trillion in new revenues through tax reform to make up for whatever spending cuts the Republicans make.

Other federal taxes kicking in this year are related to passage of Obamacare (The Patient Protection and Affordable Care Act) including: a 2.3 percent excise tax on the gross sales of certain medical devices; a cap of $2,500 on Flexible Spending Accounts, which are often used by parents with special needs children to pay for their education; a rise from 7.5 to 10 percent in the adjusted gross income threshold that medical expenses must reach to qualify for a deduction; a .9 percent tax on earned income in excess of $250,000 for families and $200,000 for individuals; a new 3.8 percent surcharge on capital gains and dividends on high earners; elimination of the corporate deduction for retirees prescriptions; and subjects small businesses organized as “Sub-Chapter S” corporations to high marginal tax rates up to 39.6 percent, limits their deductions, and adds the Obamacare surcharge on capital gains and dividends.

State tax increases

California residents face new state taxes as well.

Thanks to passage of Proposition 30, on Jan. 1 of this year the state sales tax went from 7.25 to 7.5 percent. In Placerville and South Lake Tahoe, it is 8 percent.

Proposition 30 also raised the tax bracket for upper income residents with the hike retroactive to 2012. The new rates apply to anyone making $250,000 a year or more. For residents at the top of the scale — those with an income of $1 million or more — the rate tops out at 13.3 percent.

According to the California Taxpayers Association, with the passage of Proposition 30, California now has the highest state sales tax, the second highest gas tax, the highest top personal income tax rate, and the 15th highest property taxes in the nation. It also has the highest corporate tax rate in the Western United States.

Existing taxes/fees

Aside from the new or changed taxes resulting from the recent budget agreement, there is a long list of taxes and fees Americans are already paying including: federal, state, and local income taxes; Social Security and Medicare taxes; property taxes; state sales tax; driver’s license renewal and car registration fees; taxes on TV Cable/Satellite; the federal telephone surtax, excise tax and universal surcharge; the state telephone excise tax and surcharge; gas/electric fees/and or taxes; water/sewer fees and/or taxes; cigarette taxes; alcohol taxes; federal and state gasoline taxes; federal and state inheritance taxes; gift tax; marriage, birth, death, hunting, fishing, bike, dog, etc. licenses; state park fees; watercraft registration and license; sports stadium tax; air transportation tax; new car surcharge; yacht and luxury boat taxes; school tax; road tax; use taxes; waste management tax; individual and small business surtax.

In addition there is a long list of business taxes and fees, including federal and state corporate income taxes; tax registration for a new business; employer Social Security, Medicare, federal and state unemployment tax; business registration renewal tax; Worker’s Compensation tax; the tax on imported/exported goods; oil storage/inspection fees; employer health insurance mandate tax; excise tax on charitable hospitals; tax on health insurers; excise tax on comprehensive health insurance plans; tax on indoor tanning services, tax on medical device manufacturers; tax on innovator drug companies; utility users tax, internet transaction fee; professional license fee; franchise business tax; tourism and concession license fee; wiring inspection fees; household employment tax; biodiesel fuel tax; FDIC tax; electronic waste recycling fee; hazardous material disposal fee; food and beverage license fee; building/construction permit fee; zoning permit fees; well permit tax; sales and use tax seller’s permit; commercial driver’s license fee; occupation taxes and fees; and tobacco taxes.

Contact Dawn Hodson at 530-344-5071 or Follow @DHodsonMtDemo on Twitter.


Discussion | 17 comments

  • EvelynJanuary 17, 2013 - 12:24 pm

    Whole Foods CEO says Obama healthcare law is 'more like fascism' - HERE

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  • Ed AtorrJanuary 18, 2013 - 4:41 pm

    Sorry, this editorial piece got placed in the news section accidentally.

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  • clleaJanuary 18, 2013 - 5:29 pm

    Evelyn, you are very good at submitting links, but you never add your comments. What motivates you? Don't be intimidated by your online friends, ok? This Billion $ CEO you speak of, pays minimum wage and no healthcare and he's your good guy, right? (as long as he attacks our President).

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  • EvelynJanuary 20, 2013 - 8:02 am

    cllea, in questioning my motivation you appear to suggest your own answer.

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  • EvelynJanuary 20, 2013 - 8:03 am

    TAX INCREASES THAT BECAME LAW IN 2013 UNDER 2010 AFFORDABLE CARE ACT: • Top personal income tax rate, from 35% to 41% • Estate tax, from 35% to 40% • Capital gains tax, from 15% to 23,8% • Dividend tax, from 15% to 23,8% • Medical device tax, 2.3% • Payroll tax, from 10,4% to 12.4% • ObamaCare payroll tax surcharge, 0.9%

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  • EvelynJanuary 20, 2013 - 8:18 am

    SEVERAL EXAMPLES of 2013 “TAX RELIEF” (aka Pork & Bribes) - • $14.3 billion for a two-year extension of the corporate research credit benefiting large technology companies like IBM and Hewlett Packard. • $12.2 billion one-year extension of the production tax credit for wind power. • $11.2 billion two- year extension of the active financing exception, which lets GE, Caterpillar Inc. (CAT) and Citigroup Inc. (C), among others, defer taxes on financing income they earn outside the U.S. • $1.9 billion extension of the Work Opportunity Tax Credit for hiring workers from disadvantaged groups, benefitting mega-restaurant chains like McDonalds. • $650 million tax credit for manufacturing energy-efficient appliances, benefitting mega-corps like Whirlpool. • $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects. NBC thanks you. • $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50% of the cost to maintain tracks that they own or lease. • $248 million in special expensing rules for films and television programs. • $78 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.” • $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon. • $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.

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  • JPJanuary 20, 2013 - 8:47 pm

    Forced taxation is theft. Period! It will always be . . . You can't put chocolate on a turd and call it candy.

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  • EvelynJanuary 26, 2013 - 9:13 am

    "‘Obamacare’ to hit smokers with huge penalties" - HERE - The Affordable Care Act, which critics have also called “Obamacare”, could subject smokers to premiums that are 50 percent higher than usual, starting next Jan 1. Health insurers will be allowed to charge smokers penalties that overweight Americans or those with other health conditions would not be subjected to. A 60-year-old smoker could pay penalties as high as $5,100, in addition to the premiums, the Associated Press reports. A 55-year-old smoker’s penalty could reach $4,250. The older a smoker is, the higher the penalty will be.

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  • DB SmithJanuary 26, 2013 - 9:25 am

    Evelyn, I don't think it would be out of line for the American taxpayer to DEMAND that every one of our elected politicians from the bottom to the top, be denied any healthcare coverage if they smoke anything! And on second thought we should throw in alcohol and some other things as well.

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  • EvelynJanuary 26, 2013 - 9:36 am

    I would be quite happy to make an offering to the gods of Obamacare the politicians themselves!

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  • EvelynJanuary 29, 2013 - 7:20 am

    Immigration reform could add millions of people under Obama health law - HERE

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  • DB SmithJanuary 29, 2013 - 7:29 am

    Yep and Obomba auntie will be covered too.

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  • EvelynFebruary 11, 2013 - 6:03 am


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  • Phil VeerkampFebruary 11, 2013 - 10:18 am

    EVELYN, RE BEN CARSON Obama prayer breakfast speech - LINK - CNN's Crowley Asks Panel If Dr. Carson's Speech Was "Offensive"

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  • Phil VeerkampFebruary 11, 2013 - 10:22 am

    LINK - Dr. Benjamin Carson Addresses National Prayer Breakfast, Criticizes Obamacare

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  • DeeFebruary 11, 2013 - 10:57 am

    Ed-Please show where there is opinion and not facts in this article. Thank you!

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  • DeeFebruary 11, 2013 - 11:12 am

    cllea- "FORTUNE “Best Companies to Work For” Rankings Our team members have chosen us as one of FORTUNE® magazine's "100 Best Companies to Work For" for the last 15 years. •2013: ranked #71 •2012: ranked #32 •2011: ranked #24 •2010: ranked #18 •2009: ranked #22 •2008: ranked #16 •2007: ranked #5 •2006: ranked #15 •2005: ranked #30 •2004: ranked #47 •2003: ranked #32 •2002: ranked #48 •2001: ranked #41 •2000: ranked #72 •1999: ranked #48 •1998: ranked #34 "Our Team Members are the heart and soul of this company: that's our not-so-secret sauce. Our more than 65,000 talented Team Members put us on this list, and we appreciate each and every one of them for their dedication to our company's mission. They are empowered, bold and passionate and they make great things happen for our customers, communities, supplier partners, investors, environment and themselves each and every day."—Walter Robb, Co-CEO FORTUNE cited one of the reasons Whole Foods Market again made the list is our equitable pay structure, noting that we cap salaries of executives at 19 times the average full-time salary. We also made FORTUNE's "Most Diverse" list — with a workforce made up of 44% women and 43% minorities — along with the "Best Perks" list for offering gym membership discounts, compressed workweeks and gay-friendly policies and benefits. Offering Team Members 100% paid health care premiums landed us on a list of companies with the best health care benefits. We are one of only 13 companies that have made the list every year since its inception in 1998. **************cllea-everyone loved Whole Foods until the CEO spoke out about Obamacare.

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