Actually, It’s Worse

Gerri Willis says that Middle Class Americans can expect to lose a full half of their paychecks to taxes next year:

Then there is the Federal Social Security and Medicare payroll tax of 13.3%. You pick up 5.65% while you’re employer pays 7.65%. Add them up and that’s 38.3% of middle class family incomes going to Uncle Sam. But we aren’t done, not by a long shot.

According to the Tax Foundation, the average state’s income tax rate on the middle class is 4.82%. Of course, some states have it and some don’t, but we’re taking an average here.

Now the total: 43.12% of middle class income to taxes.

Oh, and I almost forgot, unless congress makes a move, Federal Income taxes go to 28% for middle income folks next year as the Bush tax cuts expire.

Neither party has said they want that to happen, but in Washington, well, you never know.

Also the payroll tax for those folks will go to 15.3% from 13.3%percent.

But start adding up all the other taxes. Property (and renters don’t seem to understand that they pay those taxes as part of their rent). Taxes on virtually everything you buy. Gas taxes. Excise taxes. Government fees. Energy taxes. Phone taxes.

Start keeping track and it’s a lot of money going out.

Then add the costs of energy – that will be skyrocketing. Food is going up – rapidly. You pay more for everything as gas and diesel prices soar.

I really don’t think people realize just how bad this is going to get – very soon.

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4 Responses to Actually, It’s Worse

  1. feeblemind says:

    Indeed. And every tax increase means less disposable income to stimulate economic activity.

    And it looks like it will get worse.

    From Bruce Krasting:

    “I have warned readers about the possibility that the AMT (Alternate minimum tax) is going to go mainstream in 2013 here and here. Yesterday, the IRS came out with its own warning.”

    “In 2012, about 4m taxpayers will get stuck paying the AMT tax. ….. that number could go to 33m in 2013. That’s a massive increase; it will cause all sorts of problems.

    http://brucekrasting.com/irs-to-back-value-heinous-amt-to-2012/

  2. skeneogden says:

    This is why I despise the payroll tax as it hides the real impact of cumulative taxation. If people had to sit down and write a check once a year (like they once did) for the taxes they “owed” to the government we would see all hell break loose.

    Payroll taxes are pinpricks that add up to one hell of a wound at year end.

  3. Sam L. says:

    Like when doctors used to bleed patients to drain off evil humours.

  4. Gaius says:

    I think it would be a good thing to pass a law mandating people have to sign off on each tax payment made. (I doubt you could get one repealing the automatic deductions of payroll taxes outright). But make people sign for each portion of their paycheck that is being taken.

    A marvelous way of making people realize just how much is being taken.

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