Has new tax rate in 2013 harmed you?

[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]

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]

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]

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]

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]

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]

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]

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:

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]

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]

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]

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).

 

[Alan]

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.

Same for us.

 

[rodi]

Got hit with the sunsetting of the SS reduction. Planned for it - so no biggy.

Slight increase in sales tax here in Cali... haven't really noticed because... well... I hate shopping for anything other than groceries...which are tax free.

I'll continue to benefit from the child deductions since those were extended.

 

[ejman]

I am absolutely delighted - nah thrilled - that income tax rates remained at the incredibly low levels I've seen for the last decade. My Federal tax payments have been near non existent since I retired at the end of 2002 and for this gift to be made "permanent" is amazing to me. I've just started collecting SS (turned 62 a few months ago) So am also very pleased that the wage slaves are contributing to my pot in the appropriate manner

 

[Amethyst]

I pay 7% into a DB pension plan and don't pay into SS, so the FICA tax holiday did me no favors and I don't miss it

Others at work are moaning, though. Funny, I remember people dismissing the small gain they saw from the payroll tax holiday when it first came into effect. I guess that is human psychology: We tend to regret a loss more than we appreciate a gain of the same amount.

We make way below the "rich people" threshold, so our Federal tax rates will stay the same. We have been paying AMT for years and I guess we will continue to do so.

OTOH, our property tax went up $400 last year - despite no increase in valuation - as MD passed teachers' pension costs to the counties. I guess in the end, we are all robbing each other to pay for each other

Amethyst

 

[travelover]

I am absolutely delighted - nah thrilled - that income tax rates remained at the incredibly low levels I've seen for the last decade........

It is amazing isn't it? And we haven't borrowed a dime to cover our expenses.

 

[ejman]

It is amazing isn't it? And we haven't borrowed a dime to cover our expenses.

Noted. Was tempted but decided not to veer off into political lala land...

 

[GrayHare]

IF (big if) restoration of this tax means scheduled SS benefits will be fully funded for my lifetime, it will not hurt but rather help.

 

[foxfirev5]

The 2% payroll tax is noticeable but has no bearing on my already light spending. It's just a little less put into savings. I never saw the sense in the temporary reduction anyway. That's all I've got to say about that. Any more and I'd go political real quick.

 

[steelyman]

I don't really know, since this is the first year I will only have pension income (besides investments). I never paid the SS payroll tax, only money to the state. For some unfathomable reason, my state does not currently tax retirement income, so my guess is that I'll be better off (until they completely run out of money!)

 

[target2019]

My pay is down about 5% from end of last year. That's some combination of 2% more to SS, 401(k) bumped up a few points, and more withholding for certain state taxes until a max is reached.

I might get another whopping 2% raise this year, so that will offset the SS tax going back to normal.

Oh yeah, it will have some effect on my consulting income taxes, but I don't consider that harmful.