Congress tinkers with withholding

[Specop 007]

Just posting this as FYI as much as anything. Be aware that you may see a smaller checked.

Interesting that when the Administration preaches responsibility the solution to the budget is to increase income. In other words rather than cut spending they decide to increase income.

That income is coming from YOU by the way.

There is a very serious disconnect in this country. When a politician wants to increase funding on some random social program people cheer. They never seem to realize that funding increase is coming from the very guy cheering.

Cant wait for the Hell-th care tax increase too. Hope and Change, Transparency, on and on.

http://biggovernment.com/2010/01/06/dems-tinker-with-withholding-tax-tables-for-2010/#idc-container

Congress Tinkers with Withholding Tax Tables for 2010
by SusanAnne Hiller

Recently, retired military have received e-mail messages notifying them of a withholding tax increase. The email states:

NO ANNUAL COST OF LIVING ADJUSTMENT (COLA) WILL BE ADDED TO MILITARY RETIRED PAY IN 2010.

DUE TO RECENT LEGISLATION YOUR FEDERAL WITHHOLDING TAX HAS CHANGED.

After much investigating and several discussions with the IRS, it appears the Democrats have played a “cash-flow trick” on working Americans and are taking more out of American’s paychecks across the board–all the while touting the Making Work Pay tax credit.

MPj03168680000[1]

The trick, when looking at the new withholding tax tables for 2010 as compared to post-stimulus 2009, buries an increase in federal withholding taxes–for all income categories–basically giving the government an interest-free loan until current year taxes are filed next year. Some would blame the increase in withholding on the Making Work Pay tax credit being spread out over 12 months as compared to 2009, which was only over 9 months, but this would be impossible as some middle class wage categories carry an increase in the withholding tax of over $200 per pay period.

Unlike the middle class wage earners, who are going to see huge amounts taken out of their paychecks, unless they increase their exemptions on their W4 form, it’s an increase that most wouldn’t even notice–$10 or $20 in some cases. Here are some of the “highlights” of the new 2010 withholding tables:

1.) Congress has lowered the threshold to capture more wages that qualify to owe taxes–across the board. For example, in 2009 the withholding tax threshold began at weekly single wage levels of $138. In 2010, that same wage is lowered to $116. In short, instead of the taxable wage starting at $138, it is now down to $116–which changes the income threshold and taxes even poorer Americans.

For married couples, the change in the weekly base taxable wage changes from $303 in 2009 down to $264 in 2010. These lower wage thresholds can be seen throughout the new withholding charts for weekly, biweekly, semi-monthly, monthly, quarterly, semiannual, and annual, as well as daily and miscellaneous pay periods.

This across-the-board reduction in the initial wage threshold increases the number of wage earners who would have to pay taxes.

2.) Instead of seven (7) wage categories, there are now nine (9) wage categories. The new structure allows for direct taxation on the middle class with these wages broken out into smaller categories. The direct hit on the middle class withholding taxes can be seen on all of the new tables. Additionally, the IRS could not explain these changes.

Let’s look at the actual numbers for one category and compare them from 2009 to 2010:
2009 Biweekly, Single, Payroll Period, after subtracting withholding allowances

Not over $276: $0 in taxes
Over $276 – $400: 10% payroll tax
Over $400 – $1,392: $12.40 plus 15% of excess over $400
Over $1,392 – $2,559: $161.20 plus 25% of excess over $1,392
Over $2,559 – $6,677: $452.95 plus 28% of excess over $2,559 (Notice the large salary range)
Over $6,677 – $14,423: $1,605.99 plus 33% of excess over $6,677
$14,423: pays $4,162.17 plus 35% of excess over $14,423

Let’s look at the new numbers for 2010 Biweekly, Single, Payroll Period, after subtracting withholding allowances

Not over $233: $0 in taxes
Over $233 – $401: 10% payroll tax
Over $401 – $1,387: $16.80 plus 15% of excess over $401
Over $1,387 – $2,604: $164.70 plus 25% of excess over $1,387
Over $2,604 – $3,248: $468.95 plus 27% of excess over $2,604 (Notice the large salary range is gone)
Over $3,248 – $3,373: $642.83 plus 30% of excess over $3,248 (Notice the substantial increase and 30% tax rate on these wages)
Over $3,373 – $6,688: $680.33 plus 28% of excess over $3,373
$14,450: pays $4,169.99 plus 35% of excess over $14,450

These patterns of additional withholding can be seen throughout the new charts for the 2010 tax year for single and married persons. It appears that everyone earning a paycheck is affected, not just retired military; social security payments will remain the same.

Why would the Democrats tinker with the withholding taxes and, ultimately, cause more stress on Americans and businesses? Why would the Democrats create more wage categories and deliberately target the middle class with a huge withholding increase and 30% tax rate? Are the Democrats trying to backfill the deficits they created in 2009? Because taxpayers will have overpaid the federal government payroll taxes, will they be eligible to get back this additional withholding money in a tax refund when filing in 2011? Do taxpayers in the hardest-hit wage categories even realize that their paychecks are going to be significantly lower, unless they make the necessary changes?

Maybe there is a good explanation for the increase in the withholding taxes from 2009 through 2010, but I remain skeptical, because inherently, Democrats do not have the capacity to reduce taxes and typically make up the revenue somehow.

Get your calculators out and you do the math. Go here for 2009; start on page 4. Go here for 2010; start on page 39.

And you should remember this and the fact that House and Senate Republicans united against the stimulus bill, which may have been the trigger to all of this. And Obama and Congress should remember this from December 21, 2009:

After years of irresponsibility, we are once again taking responsibility for every dollar we spend the same way families do. It’s true that what I’ve described today will not be enough to get us out of our fiscal mess by itself. We face a deficit that will take some tough decisions in the next year’s budget and in years to come to get under control. But these changes will save the American people billions of dollars. And they’ll help to put in place a government that’s more efficient and effective, that wastes less money on no-bid contracts, that’s cutting bureaucracy and harnessing technology, that’s more fiscally responsible and that better serve the American taxpayer.” ~President Obama

Responsibility. Really?

 

[Doc Savage Fan]

You lie! Obama promised no middle class tax increases. No reason to withhold more. /s

 

[MotF Bane]

After years of irresponsibility, we are once again taking responsibility for every dollar we spend the same way families do. It’s true that what I’ve described today will not be enough to get us out of our fiscal mess by itself. We face a deficit that will take some tough decisions in the next year’s budget and in years to come to get under control. But these changes will save the American people billions of dollars. And they’ll help to put in place a government that’s more efficient and effective, that wastes less money on no-bid contracts, that’s cutting bureaucracy and harnessing technology, that’s more fiscally responsible and that better serve the American taxpayer.” ~President Obama

Fucking bullshit.

 

[StageLeft]

[/I]Fucking bullshit.

Breathtaking understatement.

The government is stealing from the future and worse it's at an accelerated pace. It does it because its people allow it to. They know no better or if they do they demand no better. They are like Moonbeam's pigs trying to eat as much as they can now even at the expense of their children's food, for their kids are the future from which they thieve.

 

[spidey07]

Bastards. But you know this was coming. Just wait until the big tax increases hit. My guess is the withholding adjustments are to take into account the tax hikes on everybody. Most people withhold too much so it's not like they need more money, it's to account for the tax increases.

 

[StageLeft]

Bastards. But you know this was coming. Just wait until the big tax increases hit. My guess is the withholding adjustments are to take into account the tax hikes on everybody. Most people withhold too much so it's not like they need more money, it's to account for the tax increases.

There won't be a tax increase if you make under $250k. Obama promised it.

 

[EagleKeeper]

This is not a tax increase.

It is just a temp loan to Uncle with the "promise" that they will allow you to get it back next year.

Ocean front property available in Arizona at fire sale prices.

 

[StageLeft]

This is not a tax increase.

It is just a temp loan to Uncle with the "promise" that they will allow you to get it back next year.

Ocean front property available in Arizona at fire sale prices.

Tax receipts are hugely down year over year at both state and federal levels, so this is a desperate effort to pull from next year and burn through it. Next year this won't be an option. Then what?

 

[Whoozyerdaddy]

Tax receipts are hugely down year over year at both state and federal levels, so this is a desperate effort to pull from next year and burn through it. Next year this won't be an option. Then what?

You already know the answer to that... and it's not 'spend less'.

 

[spidey07]

This is not a tax increase.

It is just a temp loan to Uncle with the "promise" that they will allow you to get it back next year.

Ocean front property available in Arizona at fire sale prices.

Fine, I'll add another allowance or two to my W-4. But make no mistake, this is to account for the tax hikes that are coming. There is no reason to adjust withholding if there isn't an accompanying tax liability increase.

Some of those changes represent a 10%+ increase in taxes!

 

[Specop 007]

Tax receipts are hugely down year over year at both state and federal levels, so this is a desperate effort to pull from next year and burn through it. Next year this won't be an option. Then what?

Green shoots, Hope and Change, transparency.......

What could possibly go wrong?

 

[allthatisman]

Funny, this is the same thing they did not too long ago here in California. If the federal government is mimiking the State of California's accounting prowess, we are ALL royally screwed...

 

[Specop 007]

Skoorb I'm rather suprised you didnt remember this.

In the beginning of 09 they lowered the withholdings in order to stimulate the economy. The joke around the office was "What the hell am I going to do with that extra $4?". However they did not adjust the tax liability.

Simply put in 09 they took less but you were still obligated to pay the same amount. Which means your 09 taxes, filed in 10 of course, could put you in a bind because you didnt have as much taken out for the same tax liability throughout the year.

Now they are raising withholding again, above what they lowered it. What could happen for a small select group of people is your going to have less paycheck in 10 AND have a tax bill from your 09 taxes.

Wont that be fun?

 

[StageLeft]

Skoorb I'm rather suprised you didnt remember this.

In the beginning of 09 they lowered the withholdings in order to stimulate the economy. The joke around the office was "What the hell am I going to do with that extra $4?". However they did not adjust the tax liability.

No kidding my memory is like a damn sieve. I expect to get Alzheimers very early, actually.

Now that you mention this, though, I do remember it. It was like $40 or something. Yeah now it really does ring a bell. I remember thinking how pathetic it was.

 

[EagleKeeper]

This is not a tax increase.

It is just a temp loan to Uncle with the "promise" that they will allow you to get it back next year.

Ocean front property available in Arizona at fire sale prices.

Tax receipts are hugely down year over year at both state and federal levels, so this is a desperate effort to pull from next year and burn through it. Next year this won't be an option. Then what?

What else - tinker with the tables again until the politicians can stand up and officially place taxes on the middle class. That can not be done until Obama gets through 2012. Otherwise it will be a repeat of Bush Sr. "No New Taxes"

 

[Specop 007]

No kidding my memory is like a damn sieve. I expect to get Alzheimers very early, actually.

Now that you mention this, though, I do remember it. It was like $40 or something. Yeah now it really does ring a bell. I remember thinking how pathetic it was.

I cant say much, I forgot about it too. It was my mom actually that pointed it out after I emailed her the article.

 

[drebo]

Honestly, I'd rather have the money in my pocket than with the federal government. They have no constitutional right to the money I earn. Let my contributions be willing, not forced. The federal government had been intended to make its money off of import duties and tariffs. Raping its citizens dry will not accomplish anything good.

I've said it a hundred times: cutting spending is the only way to reduce the deficit. You will never be able to tax enough to pay for supporting everyone. Eventually, the government will just be taxing itself, because everyone's sole income will be from the government. It's not a sustainable cycle.

 

[allthatisman]

Honestly, I'd rather have the money in my pocket than with the federal government. They have no constitutional right to the money I earn. Let my contributions be willing, not forced. The federal government had been intended to make its money off of import duties and tariffs. Raping its citizens dry will not accomplish anything good.

I've said it a hundred times: cutting spending is the only way to reduce the deficit. You will never be able to tax enough to pay for supporting everyone. Eventually, the government will just be taxing itself, because everyone's sole income will be from the government. It's not a sustainable cycle.

Well TECHNICALLY... you, like the rest of the country, could simply change your withholding status and totally undermind what they are attempting to do.

 

[dainthomas]

Oh no, I have to amend my W4! THE HORROR!!!1111!11!

 

[Zebo]

haha! Wage earners get fucked again. You can bet a pol will tax you 100% before he cuts his salary or go after people who don't mess with W2s.

 

[Zebo]

Honestly, I'd rather have the money in my pocket than with the federal government. They have no constitutional right to the money I earn. Let my contributions be willing, not forced. The federal government had been intended to make its money off of import duties and tariffs. Raping its citizens dry will not accomplish anything good.

I've said it a hundred times: cutting spending is the only way to reduce the deficit. You will never be able to tax enough to pay for supporting everyone. Eventually, the government will just be taxing itself, because everyone's sole income will be from the government. It's not a sustainable cycle.

You'll never be able to have that working for someone else. It's pretty simple - The Feds make your deductions instead of you.

 

[ebaycj]

Fine, I'll add another allowance or two to my W-4. But make no mistake, this is to account for the tax hikes that are coming. There is no reason to adjust withholding if there isn't an accompanying tax liability increase.

Some of those changes represent a 10%+ increase in taxes!

Obviously you do not understand the concept of time-value-of-money.

 

[halik]

Heh we'll see what my after-tax direct deposit comes in as and I'll be sure to adjust the allowances according.

 

[palehorse]

fucking despicable.

I'd love to see someone here make a grade-A effort to excuse this underhanded bullshit.