NEW TAXES, Part 2

More on 2013 taxes…

The ESTATE TAX went up to 40% from 35% but the first $10 million of a family estate is exempt. I hate this tax because the owner of the estate who has died already paid taxes on that money so I don’t see why his heirs have to pay more taxes on it…the Republicans tried to ban this tax altogether but the Democrats keep it alive. At least they are exempting $10 million since the Democrats originally wanted only $1 million exempted.

The Medicare surtax on unearned income of 3.8% that I mentioned before is on the lesser of [net investment income] or [the excess of modified adjusted gross income] over the 2013 threshold of $250,000 for joint filers. Anyway you cut it; it is a new tax on so-called high income earners to support Obamacare.

Speaking of Medicare, we now have 1.45% deducted from our pay for Medicare. Under the new law, an additional 0.9% (2.35%) will be deducted on wages above the threshold amounts of $200, 000 for single and $250,000 for $250,000 for joint filers.

Again, speaking of medical care, people who kept tabs on all their medical expenses could deduct them on their income tax if the medical expenses were higher than 7.5% of a person’s adjusted gross income. So for someone making $50,000 a year, the allowable deduction would be any amount over $3,750. In 2013 the threshold goes up to 10% so now anything over $5,000 for someone making $50,000 a year.

So as you can see, taxes are going up for some but as the Democrats like to say, but only for the few, 99% of taxpayers will not see any increase.

I guess it could have been worst if the Democrats had their way so thank heavens the Republicans control the House of Representatives, at least on tax issues.

Obama still got unemployment benefits extended…again…and extended child tax credit, earned income credit and a college tuition credit and blocked cuts in Medicare reimbursement to doctors which would have been bad for those on Medicare.

One thing that I thought was very good was permanently fixing the ALTERNATIVE MINIMUM TAX by indexing it for inflation; it was unfair and a pain in the ass.

So as you can see there are tax increases and substantial ones, but mainly for higher income people.

BUT as you can also see, there were no cuts in wasteful spending. The Democrats don’t want to cut anything, just increase on the “wealthy” and Republicans want to cut everything especially on entitlement programs like Social Security, Medicaid and Medicare, all important to ordinary folks but don’t ask the Republicans to cut military spending; that is a sin.

The automatic spending cuts (fiscal cliff) have been deferred till March 1, 2013 so here comes another big fight and an even bigger fight when the debt ceiling needs to be raised. If it is not raised, the government cannot pay its bills so that should be a joy to watch.