Take Your Tax Medicine – It’s good for Government
Tax your tax medicine-Its good for Government. With the U.S. Supreme Court upholding the Patient Protection and affordable Care Act better known as Obamacare, the law and tax increases really begin to effect in 2014. What the new IRS tax forms in 2014 will look like is anybody’s guess but we do know with the swing vote belonging to Chief Justice Roberts’ the tax portion of the law was constitutional while under the commerce clause the law was unconstitutional. However with the law upheld as a tax, it was the largest tax increase in the country’s history passed by a Democratic Congress and signed by President Obama. I have heard that there are 21 tax increases in the law with 12 of the tax increases affecting everyone including those making under the $250,000/year that President Obama said he would not raise taxes on. Some estimates put the effect of the “tax” increase at over $600 billion when the law tax effect.
In addition to Obamacare, the Bush tax cuts that were to expire last year and was extended for another year are expected to expire at the end of this year unless Congress and the President acts to extend them. Some estimates put the tax increase from these expiring tax cuts at over $1 trillion over 10 years or $100 Billion a year. The Congressional Budget Office (CBO) according to Fox News reported that if all the Bush tax cuts were allowed to expire, the economy would shrink by 1.3% and would increase everyone’s taxes who currently pay taxes.
One of the tax cuts that will be expiring is the 2% employee social security tax cut. An individual making $1,000 a week would pay additional $20 a pay period or $1,040 a year in additional taxes. An individual making $500 a week would pay an additional $520 a year in social security tax. Will Congress replace the employee social security tax with something else is anybody’s guess. The employee social security tax cut came in effect after the “Making Work Pay” tax cut of $400 for individuals and $800 for couples expired.
Combined the Obamacare taxes on healthcare and the Bush taxes and we talking an economic impact of over 800 Billion a year that consumers no longer have. While I understand the need for Congress and government to get the budget and spending under control, the economic impact currently is unknown given the fragile world economy. So take two aspirins and don’t call the government, since they still haven’t figured out the healthcare law and how it affects you or the economy.
How would the combination of the Bush Tax Cuts, if allowed to expire, and Obamacare affect you or your business?
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