Federal income tax changes to your January paychecks
Obama administration and US congress have agreed to the 2013 federal income tax rates, but it may affect your January paychecks. The Washington leaders are busy in a talk about 2013 income tax negotiations, but still no final agreement has been reached. UC process the payroll payments to many employees early in January and you will continue with federal income tax rates of 2012 till President Barrack Obama and Congress reach a final agreement and implement new guidelines for 2013 federal income tax brackets.
The new tax rates will be published once IRS offers the official guidelines and organizations will need to upgrade their payroll structure accordingly. Federal income tax rates for 2013 will be published along with IRS publications and new payroll system will not make any adjustments after fully implementation of new tax rates. But it is important to know that January paychecks will reflect the two tax changes;
- The updated 2013 California income tax rates resulting from income passage of Governor Brown and sales tax initiatives for 2013, under proposition 30.
- QASDI social security of employee will be updated from current value of 4.2 percent to new value of 6.2 percent tax rate.
It means 25 percent federal income tax along with 38.3 percent Medicare payroll taxes and 13.3 percent social security are going to federal income tax in 2012. For a middle-class tax filer, the average state income tax is 4.82 percent, which brings 43.12% to state and federal taxes.
Categories: Federal Tax, Income Tax, Tax Law Tags: corporate tax, federal income tax, federal tax, income tax, payroll tax, tax code, tax increase, tax reform
A half century of Federal income tax changes for individuals
Federal income tax changes for individuals are linked to the first five income quintiles over the last half century and there are many things to observe from it. First, we have noticed that everyone loves the income tax cutting. Most of the changes are tax cuts, which are mostly for the bottom 80% of the population based on income.
Key point to note is that tax cuts are always good news for top income earning groups, because they pay more from their earnings and federal income tax cuts pay more in return. In 2009 and 2010, the top 10 percent income earners paid roughly 70 percent of federal income tax, a major cause of income inequality in United States. Some tax cuts are more broad-based as compared to others, like major federal income tax cuts in 1964 and 2001. If we compare them to 1982 and 2003 tax cuts, the prior tax cuts were broad based.
Former President Bill Clinton raised federal income tax from 36 percent to 39.6 percent for top earning groups in 1993 and decreased the percentage of tax to be paid by lower earning groups. The economic growth, more job opportunities, substantial growth, recessive quarters and no empirical support also affected the federal income tax percentage. Currently a summary was published by New York Times Economix, in which there is a long detail of half century individual federal income tax changes.
Categories: Federal Tax, Income Tax, State Tax, Tax Law Tags: federal income tax, federal tax, income tax, tax code, tax law, tax reform
79 percent say all Americans should pay federal income taxes
Fox news reported that majority of Americans agree to pay federal income tax, though it may be as little as 2 percent of their earnings. According to a Fox news poll released on Thursday, 19 percent of Americans have agreed that they should pay something for federal income tax. Among these voters who favored the federal income tax, 71 percent are Democrats, 83 percent are Independents and 85 percent are Republicans.
IRS announced that 41 percent of the tax fliers didn’t pay the federal income tax last year. It was estimated by Tax Policy Center that non-payers percentage will be increased to 46 percent next year. Most of the voters are those who have come across Republican nominee Mitt Romney’s broadcast video where he remarked that about “47 percent of Americans” don’t pay federal income tax. During presidential campaigns, Mitt Romney also commented that USA is becoming an entitled society and most are dependent on the government. Still 63 percent of Americans think that what Mr Romney said has certain truth in it.
On average, three out of four voters believe that Americans are somewhat dependent on the government. About 46 percent of the voters think that federal government is doing too much nowadays. Only 22 percent of Americans thinks that federal government is doing only a little. The online poll has divided the citizens between federal income tax payers. These voters were all registered voters who also voted for the U.S presidential election.
Categories: Federal Tax, Income Tax, State Tax, Tax Law Tags: federal income tax, federal tax, fiscal cliff, income tax, tax pledge, tax reform, tax the rich