According to the bill, Americans at all income levels would see a two-percentage-point jump in the employee portion of the Social Security tax. It will return to 6.2% in 2013 after a stimulus rate of 4.2% expires.
And then there are the Obamacare tax increases,
As for small business, the overall tax increase this year is substantial. The new listed top rate of 39.6% doesn’t include the phaseout of deductions that will take the actual rate to 41% or so for many taxpayers. Add the ObamaCare surtaxes on investment income (3.8%) and Medicare (0.9%), as well as the current Medicare tax of 1.45% (employee share), and the real top marginal tax rate on a dollar of investment income from a bank savings or money-market account will be about 46%. Throw in state taxes, and the marginal rates in many places will be in the mid-50%-or-higher-range.
Meanwhile, even as Democrats claim these tax rates won’t matter to investment, Senators stuffed their bill full of tax subsidies for special business interests. The wind tax credit survived (cost: $12.1 billion), and so did the tax breaks for cellulosic ethanol ($59 million) and the impoverished producers of Hollywood ($248 million).
But I digress. The fiscal cliff carries $4 trillion price tag over next decade. Here are 6 Things You Won’t Believe That Are In The Fiscal Cliff Bill That The Senate Passed At 2 AM While Most Americans Were Drunk. So you’re OK if you’re in the Puerto Rican rum, asparagus, or biodiesel businesses.
The rest of us can rejoice in the fact that we’re paying for Obama’s $7million Hawaiian vacation, to which he returned less than an hour after Congress and the White House resolved the fiscal cliff.
Budgets are for little people.