Has new tax rate in 2013 harmed you?

[FANOFJESUS]

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Originally Posted by travelover Michigan started taxing pensions again this year. That has hurt me and I've cut back spending, especially in the state.

Several states are thinking about doing this since they are hurting.

[RunningBum]

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Originally Posted by LeavingOhio There is the 2% Tax Holiday that expired for everyone.

That is the return of SS to 6.2% that I mentioned.

[GalaxyBoy]

I would think most of the members of this forum always recognized that the SS tax cut was always meant to be temporary and was set to expire at the end of last year (after being extended from the year before), and were prepared to handle its expiration. But all I hear at w*rk is how everybody's taxes went up and what a surprise it was and how it was all one party's fault, etc. etc. Or just as likely, "Tax holiday? What's that?" from college-educated professionals.

But I'll pile on to the opinions above. I can't help but be pleased about the 0% LTCG rate being made permanent (yes, I know) and how otherwise things really didn't change much for my tax bracket. I gross 6 figures, but by withholding the max amount in 401k, contributing to IRA, etc. it gets my taxable income down to where I can take advantage of at least a few thousand $ worth of "free" LTCG.

[Mulligan]

Quote:

Originally Posted by GalaxyBoy I would think most of the members of this forum always recognized that the SS tax cut was always meant to be temporary and was set to expire at the end of last year (after being extended from the year before), and were prepared to handle its expiration. But all I hear at w*rk is how everybody's taxes went up and what a surprise it was and how it was all one party's fault, etc. etc. Or just as likely, "Tax holiday? What's that?" from college-educated professionals. But I'll pile on to the opinions above. I can't help but be pleased about the 0% LTCG rate being made permanent (yes, I know) and how otherwise things really didn't change much for my tax bracket. I gross 6 figures, but by withholding the max amount in 401k, contributing to IRA, etc. it gets my taxable income down to where I can take advantage of at least a few thousand $ worth of "free" LTCG.

Doesn't this just reinforce the fact of how clueless the average citizen is concerning these matters. But they probably know what Snooki is up to today, however. Where I work pt, the boss had to send out a memo to explain it as no one knew why or for what reason their taxes just went up. I would bet most didn't even know that they went down 2 years ago, or for what reason if they did notice.

[HFWR]

Quote:

Originally Posted by Walt34 And I always thought the cut in SS taxes was, to put it mildly, unwise anyway.

It was the only way to cut taxes on lower income workers.

[Zathras]

If anything, we may have been helped a tiny bit. Stock markets reacted positively, including many of my stocks.
If we actually could get some more certainty in the legislature, regardless of what the specifics are, it would help businesses and investors even more.

[LeavingOhio]

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Originally Posted by audreyh1 Uh, no, only for people working and paying into Social Security. This does not affect retirees, and not everyone working pays into Social Security.

Correct...everyone who is working (and paying into SS) is what I should have said. Also right that not everyone pays into Social Security. As I'm still working and paying into Social Security, I'm not yet thinking about those who aren't and don't pay into social security, even though I know those who aren't working anymore and those who are but don't pay into social security!

Everyone drives a Honda CRV too, right?

[LeavingOhio]

Quote:

Originally Posted by RunningBum That is the return of SS to 6.2% that I mentioned.

True. I misread your previous post.

[FIREd]

DW's paycheck is a little bit smaller, as expected. No harm done.

[travelover]

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Originally Posted by rec7 Several states are thinking about doing this since they are hurting.

In Michigan the tax on pensions enabled an elimination of a business tax, so net revenue may be a wash.

[bUU]

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Originally Posted by LeavingOhio Don't want to get political, but I'm just curious if the new tax rates have done enough to make you change your spending.

You may have preferred it if you actually asked that question, then, instead of headlining your thread with the more loaded question. People aren't "harmed" by having their spending affected by changes in the economic environment. The word "harmed" has too many connotations to let its misuse go with impunity.

In a broader sense, I am cognizant of the debt our nation is going to leave the next generation, so trading off some more taxes today instead of increasing the debt more for tomorrow is a wash.

[donheff]

Since I am not going to be in a high rate for the foreseeable future and am not subject to payroll tax all I see is a permanent tax cut.

[LeavingOhio]

Quote:

Originally Posted by bUU You may have preferred it if you actually asked that question, then, instead of headlining your thread with the more loaded question. People aren't "harmed" by having their spending affected by changes in the economic environment. The word "harmed" has too many connotations to let its misuse go with impunity. In a broader sense, I am cognizant of the debt our nation is going to leave the next generation, so trading off some more taxes today instead of increasing the debt more for tomorrow is a wash.

By using the word "harmed", I leave it up to the responder to decide if they are "harmed" or not. I didn't intend it to be a loaded question. It's a fair question. Some will think they are "harmed" and others not. I used "harmed" simply because it is a short word that easily fits in the thread title. My question was more accurately asked in the body of my first post. Even if you think the word "harmed" makes it a loaded question, it can still be answered without being political...and people have answered without being political, so mission accomplished.

[FUEGO]

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Originally Posted by Mulligan Doesn't this just reinforce the fact of how clueless the average citizen is concerning these matters. But they probably know what Snooki is up to today, however. Where I work pt, the boss had to send out a memo to explain it as no one knew why or for what reason their taxes just went up. I would bet most didn't even know that they went down 2 years ago, or for what reason if they did notice.

My employer and DW's employer sent out similar memos to help explain why your take home pay is shrinking. I would say the average understanding of tax code and withholding and marginal tax rates etc is surprisingly low even among smart college educated professionals.

[MichaelB]

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Originally Posted by LeavingOhio By using the word "harmed", I leave it up to the responder to decide if they are "harmed" or not. I didn't intend it to be a loaded question.

Judging by the responses, most people got your intent.

[bUU]

Including myself:

Quote:

In a broader sense, I am cognizant of the debt our nation is going to leave the next generation, so trading off some more taxes today instead of increasing the debt more for tomorrow is a wash.

... but that wasn't the point I was making. We're having a discussion on another forum about a Santa Clause arrested for refusing to follow the instructions of police officers and long-story-short that discussion has me very cognizant of how people seek to manipulate the media, with flashy headlines that mislead. Sorry for seeing that in this.

[Mulligan]

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Originally Posted by FUEGO My employer and DW's employer sent out similar memos to help explain why your take home pay is shrinking. I would say the average understanding of tax code and withholding and marginal tax rates etc is surprisingly low even among smart college educated professionals.

I would agree with that. My friend just got back from a meeting the other day and the subject of retirement came up. They all believed their state pension was 100% state income tax free. He couldn't convince them that was wrong, and they would have none of it. So I had to send my friend a link so he could pass it on to the hard heads that they will be paying state income taxes on their pension income above the social security limit. College degrees certainly don't equate to knowledge of common tax laws, but stubbornness to refuse to listen to common sense should be though.

[FUEGO]

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Originally Posted by Mulligan I would agree with that. My friend just got back from a meeting the other day and the subject of retirement came up. They all believed their state pension was 100% state income tax free. He couldn't convince them that was wrong, and they would have none of it. So I had to send my friend a link so he could pass it on to the hard heads that they will be paying state income taxes on their pension income above the social security limit. College degrees certainly don't equate to knowledge of common tax laws, but stubbornness to refuse to listen to common sense should be though.

Your friend must have been in a meeting with my former manager...

[Mulligan]

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Originally Posted by FUEGO Your friend must have been in a meeting with my former manager...

So you have met a few of them in your day, huh? These thick heads would not believe him, even when he clearly told them that his best friend (me, who is in the same pension system, already retired) was paying state income taxes on his pension.

[traineeinvestor]

I will be hit by the tax increases but I can't say that I will be genuinely harmed by that as I have enough to FIRE on already and will drop out of the US tax net after this year (a member of the class of 2013).