CBS Money Watch explains that the only people who are actually guaranteed to pay more in taxes this coming year are normal working class Americans, thanks to the payroll tax. The higher income earners, they say, have ‘tax reduction strategies’ that can help lower their taxes so that at the end of the day they aren’t in the top bracket where taxes got raised.

So basically, the ‘protected Middle Class’ that Democrats claim they stand for are the ones guaranteed to get gouged:

CBS MONEY WATCH – The “fiscal cliff” clash in Washington may leave middle- and lower-income Americans paying more in taxes while preserving a range of tax breaks for various industries and businesses.

After Congress opted to let a “holiday” on Social Security taxes lapse, under the bill signed into law on Wednesday working Americans will see a 2 percent increase in taxes on their gross salaries or wages. Make $50,000? That’s another $1,000 in taxes withheld every year. Someone making $15,000 would pay an additional $300. But because payroll taxes are capped for incomes greater than $113,700, people whose income exceeds that threshold pay $2,274 more a year.

It’s a regressive tax: The higher the income, the smaller percentage the increase represents. For everyone, meanwhile, it’s a net increase.

Will the rich really pay more?

The top marginal rate — the tax rate on the highest income brackets — rose to 39.6 percent, from 35 percent, for annual incomes over $400,000 for individuals and over $450,000 for households. Rates on long-term capital gains, dividends and estate tax rates for top earners also rose.

But given available tax reduction strategies, the impact of these increased rates can be greatly modified.

For example, in 2009 (the last year for which the IRS has available statistics) more than 790,000 tax returns fell under the then-top marginal rate of 35 percent. But after credits and deductions were applied, the average tax paid on adjusted gross income was 25.9 percent. The percentage paid on so-called modified taxable income — “the actual base on which tax is computed,” according to the IRS — was 29.7 percent.

In other words, relatively few taxpayers whose income reaches the top income tiers pay close to the listed top rate. It will be years before there is data to show whether the actual tax paid by top earners will come close to the 39.6 percent rate, or even the old 35 percent one.

In effect, the only ones guaranteed to pay more in taxes this coming year are individuals who aren’t top earners.

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76 comments
BikerHoop
BikerHoop

Sounds like I'm going to hear the Obamabots at work start squealing soon. Can't wait. I tried to tell them what the usurper-in-thief was up to. I don't have to tell y'all what they said. Anyway, the last 'laugh' is on them... and I will rub it in.

mediaaccess1
mediaaccess1

It's always been that way, and Obama's an idiot- well, I wish he were. No, he's not an idiot, he just hates us all.

PatrickHenrysBody
PatrickHenrysBody

I...am...so...surprised. Zero said that the middle class "will not see their taxes go up." He was right. They didn't see their taxes go up, although they did. Zero made sure of that.

repubboy
repubboy

Obama wants more taxes.. Come on America Wake UP !!!

Conniption Fitz
Conniption Fitz

So many lies floating about from every direction. Turns out, there is no tax relief for middle income families...in fact, that is what they raised. The rich are well-protected.

What we do know is that there is a 41 to 1 ratio spending to cuts.

ON A GRAPH, IT LOOKS LIKE THIS: http://directorblue.blogspot.com/2013/01/chart-putting-senate-cliff-deal-in.html

A picture is worth a thousand words.

It would seem that DC stands for Dirty Crooks.

The highest per capita incomes are in the DC area...

and the highest increase in incomes IN 2012 is in the DC area.

Tells us all we need to know.

c4pfan
c4pfan

What else is new and how much you want to bet the GOP will get the blame?

ryanomaniac
ryanomaniac

Its more like they'll take the blame. The GOP are getting good at getting ahead of the situation.

Amy
Amy

LOL - sick but true...

Orangeone
Orangeone

As much as I hate this bill, it permanently fixed AMT which if left unpatched would have seriously gouged the middle class. That can had been kicked down the road for a very long time.

WordsFailMe
WordsFailMe

Libs, Democommies, Unioniistas and socialist knee bangers- Welcome to Obama's world.

And, "he gonna do mo...."

Rocco11
Rocco11

You would like to think that at some point the state run Obama sycophant media would be forced to put his water down, and report honestly on the sheer volume of his destruction, but unfortunately their history suggests they're incapable of reporting the truth on fellow travelers.

Libertyship46
Libertyship46

They will always come after YOU, regardless of how much you make. You can't have a socialist state without confiscating everybody else's money. Somebody has to pay for it, and that "somebody" is YOU. YOU are going to get stuck with the bill. And I will bet that it will only be a matter of months before the liberals demand a "Value Added Tax" (VAT) on everything to pay for our enormous debt which Obama drove sky high. THAT will be the cruelist tax because it will hit literally everybody and everything, from food to energy to every single commodity you buy. And if it worked so "well" in Europe, why not here? After all, Obama wants to turn us into a European-style welfare state, so why not go all the way and have a VAT tax as well? It's coming. It's only a matter of time.

Orangeone
Orangeone

I'm afraid you are correct and it will be on top of income tax, ObamaTax, etc.

joyfulgiver
joyfulgiver

Considering the fact that the SS tax cut was not renewed and that affects every single person that earns a paycheck, I think the article was written to cover up that fact. I love the way they word things in this article, like a 2% increase in SS taxes on your paycheck. How about wording it like this:

Since, the SS tax cuts were not renewed, there will be a 2% decrease in your annual take home pay, for instance if you make $47,000 a year your annual pay decrease is $940 which will be a monthly pay check decrease of $78.

Now, that puts things in perspective!

Orangeone
Orangeone

But it's putting it back to where it was and that should be included.

colliemum
colliemum

Winston Churchill said: "There is no such thing as a good tax."

KenInMontana
KenInMontana

All those who draw a paycheck will see a 2.2% increase in the size of the bite the feds already take out every pay period. A little gift of "equalization" from our government.

Orangeone
Orangeone

The 2% SS tax is returning to the 6.2% rate we've had for many, many years. The 0.9% is the new ObamaTax for Medicare that was part of the ObamaCare legislation.

joyfulgiver
joyfulgiver

Yes, I understand it is only a return to where it was before the tax cuts, but the issue is the FACT that millions of people have relied on that extra smidgen for several years now. And with unemployment where its at and most families having to take multiple jobs to make ends meet, if your monthly budget is going to be cut by $78 it's going to hurt, especially with gas still well over $3 in most parts of the country, home heating on the rise, food prices and electricity "necessarily skyrocketing", it HURTS, a lot!

The obvious solution would have been to extending ALL tax cuts till the economy turned around and private sector jobs were created. So, now many on fixed income salaries will be scraping by even more.

Orangeone
Orangeone

I agree just want to be sure no one gets confused with the 2% from the temporary reduction with the new .9% additional Medicare tax because of ObamaCare!  They let the 2% expire in order to hide the new ObamaTax.

jleinf
jleinf

Obama wants to destroy the middle class and convertment into government dependent sheep

Sober_Thinking
Sober_Thinking

Fair Tax. I stand with it as the great equalizer.

Arrrggghhh
Arrrggghhh

Exactly. Thank you. Our current code is simply a shell game. It is so complicated and has so many moving parts that it is incredibly easy for politicians and special interests to manipulate. A single, simple, transparent tax at the retail level on new goods and services would largely end Washington's little game. The "prebate" would protect the poor. Productivity and hard work would no longer be discouraged (aka taxed). Amen to most of this class warfare crap. The answer is so simple that it's frustrating.

www.Fairtax.org.

Sober_Thinking
Sober_Thinking

Furthermore, illegal aliens and all tourists could finally pay their "fair share". See? It even has the word "fair" in it! How could bleeding heart liberals be against that? :)

PatrickHenrysBody
PatrickHenrysBody

Bingo! Excellent point! No tax dodging by the illegals and those who visit the country. Even the foreign exchange students and those who are here on student visas would have to pay.

John
John

EVERYBODY's paycheck is smaller...

No, you did not got a raise to $250,000+

Just ask your boss.

ryanomaniac
ryanomaniac

Yep, the government pisses money away with waste and fraud and ineptitude. So lets take more from us so you can keep doing what you're doing. How about combing the budget for the waste and fraud? How about doing your job? Like using math!!

What I'd like to see is these Democrats run their own household the way they handle the economy of this country. If the things you wish to do work then Democrats...start first so we have proof that this works. You'll be broke, in debt and you'll lose everything you own you pricks.

Ray
Ray

I'd like to see the Republicans who pushed and passed us over the real fiscal cliff with this deal run a real household budget like the ones they keep foisting upon us.

Sober_Thinking
Sober_Thinking

I just got an announcement from my Human Resources people in my company explaining that my Social Security tax rate would increase from 4.2% to 6.2% and that "an additional Medicare tax will be withheld" from my next paycheck. I knew it would happen but when you see it in writing, it makes your blood boil.

To put this in perspective, while I make a really good salary, I do not make more than 100k at all in any given year. Plus, I'm the sole money-maker in my household. So I am "middle class" based on many people's definition. And yet, this bill penalized me for making a salary at all... and especially for being in the middle class.

Let's not kid ourselves. This bill that Boehner and company allowed to pass, does three things: 1) It allows the damn congress to keep right on spending even though they only have a few more pennies in their pockets (relatively speaking); 2) It sets a new precendent (a new "normal") and allows the Democrats to slowly keep turning up the fire as they bleed us dry (see Scoop's Maxine Waters post in TRS); and 3) It pays for the obomination known as Obamacare.

The media is to blame for this. If they did their jobs, Americans wouldn't support this at all (at least the honest ones) and congress and the monster in the WH wouldn't either.

Orangeone
Orangeone

The 4.2% to 6.2% is returning the employee portion of SS to the level it was at before the idiot in the WH dreamed up reducing it to claim he lowered taxes but failed to communicate that those were funds that would not be deposited into the SS fund. In essence, the temporary tax reduction was really temporary. The additional Medicare tax is ObamaTax!

Sober_Thinking
Sober_Thinking

I hear you... and understand.

The bottom line is that there are now three (3) new "taxes" on me (the middle class) that weren't there before. And two (2) of them now go to pay for Obamacare.

It makes me so mad that I'm fortunately to the point of laughing because there are going to be some seriously ticked off Obama voters out there now.

You make a valid point but I remain annoyed at the Republicans. They couldn't make a stand for leaving the Bush Tax Cuts in place and lowering the upper two tiers of taxes so they could claim that they were actually in favor of lowering taxes on all Americans. Also, by doing that, it would have proven that Obamacare wasn't free at all. So they did what they always do these days, they bent over and let the Democrats have their way with them - again. Anymore, when they sleep with their mouths open, they now sound like a "wind tunnel".

So avoidable... all of this.

Sober_Thinking
Sober_Thinking

I'm smiling a toothy grin... you're 100% right. It would be nice to see them bleed a little for this government like we have been forced to do now over the past few years.

For the first time, some of them actually have some skin in the game now.

PatrickHenrysBody
PatrickHenrysBody

Obama voters can b!+ch and moan all they want. I will not feel sorry for them. They voted the SOB in for another four years. They get what they voted for.

Orangeone
Orangeone

I absolutely agree with you!  Of the 21 ObamaTaxes, 12 will negatively impact me.  I will giggle every time an ObamBot whines and may actually carry leaflets with a smiley face and Election Consequence underneath it with the ObamaTaxes listed inside :) :)  Oh the claws just might be extended a bit.....

ryanomaniac
ryanomaniac

Almost all of this boils down to the media. People cant get the honest truth. Any one that would report the truth they then demonize them over and over again so people will have a negative view of them and not take them seriously. Its disgusting. They are the head of the snake. You clip them and Obamas whole world falls apart. I just want honest reporting.

Sober_Thinking
Sober_Thinking

Spot on.

To me, they are the root of all of this evil (since Satan controls them).

Sandra123456
Sandra123456

We are ALL going to have less buying power this year whether our taxes go up or not. Because of Obama policies the cost of food, health care, probably gas and other fuels will rise as the economy chugs to a total stop. So we are all getting screwed.

Ray
Ray

But you have to ask yourself, if fuel costs goes up, who gains? If food prices go up, who gains? If the price of durable goods (which are manufactured over seas) goes up, who gains. Then ask yourself who loses?

MiketheMarine
MiketheMarine

Gasp, shock, disbelief. You mean they lied to us while screwing us?

Tell me it ain't so.......

{sarcasm off}

aposematic
aposematic

The massive success these Demonic Marxist Democrats have achieved at keeping the poor poor over the past 60 years is expanding quickly to the top tiers of the Middle Class. The so called "rich" Obuma pretends to hate get a slap on the wrist while the Middle Class producers, Small Businesses, and workers get taken to the tax cleaners. And just wait until Jan. 1, 2014, when the mandate deemed a tax by our Marxist SC Chief Justice Roberts in Obuma(no)care fully kicks in.

PicklePlants
PicklePlants

And not to mention the Obamacare taxes that hit regardless of income.

2.3% on medical devices - grandma needs an O2 tank? It's more expensive.

Do you use medical flex accounts to pay with pre-tax dollars? Not over $2500 you're not.

Americans for Tax Reform - http://www.atr.org/trillion-obamacare-tax-hike-hitting-jan-a7393

Orangeone
Orangeone

Apparently the medical device tax is also hitting dental and veterinary.

unclesamnephew
unclesamnephew

oh no! i was going to ask my doc of four legged family members if she would treat 2 legged family members to skirt arround "obama-careless".

Orangeone
Orangeone

Would be worth asking, it's squishy what is classified as a "medical device"