Just in time for all those same-sex newly-weds in the state of Washington, the Obama Administration and Democrat-pushed ObamaCare taxes will kick in, taxing married couples as one for the first time since Social Security and Medicare taxes were instituted as “payroll taxes.”
From the New York Times:
Among the most affluent fifth of households, those affected will see tax increases averaging $6,000 next year, economists estimate.
To help finance Medicare, employees and employers each now pay a hospital insurance tax equal to 1.45 percent on all wages. Starting in January, the health care law will require workers to pay an additional tax equal to 0.9 percent of any wages over $200,000 for single taxpayers and $250,000 for married couples filing jointly.
The new taxes on wages and investment income are expected to raise $318 billion over 10 years, or about half of all the new revenue collected under the health care law.
Ruth M. Wimer, a tax lawyer at McDermott Will & Emery, said the taxes came with “a shockingly inequitable marriage penalty.” If a single man and a single woman each earn $200,000, she said, neither would owe any additional Medicare payroll tax. But, she said, if they are married, they would owe $1,350. The extra tax is 0.9 percent of their earnings over the $250,000 threshold.
Since the creation of Social Security in the 1930s, payroll taxes have been levied on the wages of each worker as an individual. The new Medicare payroll is different. It will be imposed on the combined earnings of a married couple.
The NYT article advises us all, that since our employers may not (!) know how much our spouses make, we need to make sure our employers take out enough taxes each pay period or to begin making extra estimated payments on our own.
Don’t be too quick to call our Republicans “RINO’s!”
Heritage Action for America is part of the family of Heritage Foundation institutions. They have noted the purely political nature of the arguments about the “tax cut extension” and support those Republicans who voted for the recent bill that extends the payroll tax cut, unemployment benefits and prevented a huge cut in pay to doctors who see Medicare patients.
The deal comes after House Republicans prepared to move a standalone extension of the tax cuts. That changed the dynamic in two ways. First, President Obama and his allies became nervous about the fate of unemployment insurance benefits if they were not tied to the tax portion. Second, the insistence on “paying for” the extension of a tax cut (i.e., stopping a tax increase) waned. Why? Because allowing Americans to keep more of their own money shouldn’t be offset, because that wasn’t the government’s money to begin with.
Much of the gridlock surrounding the payroll tax cut extension came because Democrat negotiators insisted on preventing a tax hike by implementing a different tax hike.
Yes, Virginia (and the other 56 States), not everything in Congress is black and white – or absolutely Conservative vs. not-Conservative.
The final solution to big government is obviously to not only cut growth of government, but to get rid of past growth. We must also face the reality that spending must be cut.
However (you knew there would be a “however,” didn’t you?), the very conservative Heritage Action for America stressed to members of Congress and the rest of us that the best solution at this time was to move in such a way to prevent the other side from claiming victory – and doing so every two months throughout the election year.