Taxes have increased

Have any of you noticed that your taxes have recently increased? This is due to your employers contribution to your group health care premium is now deemed by the IRS as income to you. (Obama said that he was not going to increase the taxes of the middle class. Ha!)

We have been declaring this on our employees pay stubs for some time now and they have questioned it. Their anger is surprising, as quite a few of them are liberals. I am surprised that this has not been discussed on these forums. (Or have I missed it?)

Gee, nice try... But the increase is because the GOTeabaggerParty refused to extend the payroll tax break:

Payroll Tax Cut Expires; How Much More Will You Pay?

The fiscal cliff deal reached by the White House and Senate Republicans wouldn’t extend the payroll-tax holiday. The biggest hit to 2013 growth appears likely to come from this tax break’s expiration on Monday.

The workers’ share of the Social Security payroll tax had been lowered by two percentage points for the past two years, to 4.2% from 6.2%, amounting to an annual income boost of $1,000 for a typical U.S. family earning $50,000 a year. It provided an increase of as much as $2,202 this year for a worker earning $110,100, the maximum wage subject to the payroll tax.

The end of the tax break would effectively raise taxes for all wage earners next year, a potential surprise for many despite the expected extension of most individual income-tax rates. That would mean the highest tax burdens since 2008 for most U.S. households, before the Obama administration pushed a tax credit in the 2009 stimulus law and the payroll-tax break.

http://blogs.wsj.com/economics/2013/01/ ... l-you-pay/

Dear America: Your Higher Payroll Taxes Are Not The Result Of A Tax Increase

As a reminder, while the fiscal cliff deal extended the income tax rates for 99% of Americans, one expiring provision that was not given new life by the 11th hour negotiations was the 2% reduction to an employee’s share of Social Security payroll taxes. For 2011 and 2012, employees paid only 4.2% of their wages towards Social Security. Beginning January 1, 2013, that burden has reverted back to 6.2%. As a result, if you earn a salary, you may have noticed that your first paycheck in 2013 was 2% lighter than your last check in 2012, assuming equal pay.

The expiration of the payroll tax reduction is not a “tax hike.” When originally enacted in December 2010, the 2% reduction was originally scheduled to last only one year, its finite nature evidenced by its description in the statute as a “payroll tax holiday.”

The payroll tax debate was not a partisan one. Neither party intended to continue it, but if you want to start pointing fingers, it was the conservative corner of the Republican Party who fought like hell to prevent it from being extended back in February 2012 .

Healthcare benefits being taxed as income is also a brain-child of the GOTP... However, it only applies to "Cadillac plans" over a certain amount...and doesn't kick in UNTIL 2018....

[bluebox=:2ya239wl] Myth: You will have to pay taxes on the cost of your health care plan .
FALSE. While your health care benefits will begin to show up on your W-2 as a separate entry in January, 2012, the cost of your health plan will NOT be computed into your income. You, personally, will NOT have to pay income taxes on the value of your health care plan.[/bluebox:2ya239wl]
[bluebox=:2ya239wl] Cadillac Insurance Plans
The Patient Protection and Affordable Care Act ["ObamaCare"] (as amended by the Health Care and Education Reconciliation Act of 2010) imposes an annual excise tax on plans with premiums exceeding $10,200 for individuals or $27,500 for a family (not including vision and dental benefits) starting in 2018. [/bluebox:2ya239wl]

It's kind of like the sequester... The 'Baggers were/are all for it--until they start realizing they've been hoisted on their own petard, and it starts to bite them personally... Watching the howls of outrage as it starts to gore their own personal "oxes", (to mix my metaphors), is very entertaining.

But thanks for playing. FACTS are a b*tch, aren't they?

Which brings us back to the lying tendencies of Republicans. Can we realistically trust anything they post?

Arlen wrote: Have any of you noticed that your taxes have recently increased? This is due to your employers contribution to your group health care premium is now deemed by the IRS as income to you. (Obama said that he was not going to increase the taxes of the middle class. Ha!)

We have been declaring this on our employees pay stubs for some time now and they have questioned it. Their anger is surprising, as quite a few of them are liberals. I am surprised that this has not been discussed on these forums. (Or have I missed it?)

Arlen... you're wrong about the health insurance premium being taxable income...

Reporting Employer Provided Health Coverage in Form W-2

The Affordable Care Act requires employers to report the cost of coverage under an employer-sponsored group health plan on an employee’s Form W-2, Wage and Tax Statement, in Box 12, using Code DD. Many employers are eligible for transition relief for tax-year 2012 and beyond, until the IRS issues final guidance for this reporting requirement.

The amount reported does not affect tax liability, as the value of the employer excludible contribution to health coverage continues to be excludible from an employee's income, and it is not taxable. This reporting is for informational purposes only, to show employees the value of their health care benefits.
More information about the reporting can be found on Form W-2 Reporting of Employer-Sponsored Health Coverage.

http://www.irs.gov/uac/Affordable-Care- ... Provisions

I don't know what you are seeing on a pay stub, or what you think you are seeing, but you are not seeing any premium being taxed.

Thank you TLGOPT, you explained that well. I still do enough tax returns each year to be pretty sure no one was paying taxes on their employer based health insurance.

Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past.

Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees.

Although the tax does not start until 2018, employers say they have to start now to meet the deadline and they are doing whatever they can to bring down the cost of their plans. Under the law, an employer or health insurer offering a plan that costs more than $10,200 for an individual and $27,500 for a family would typically pay a 40 percent excise tax on the amount exceeding the threshold.

Guess it depends on what kind of policy you have.

http://www.nytimes.com/2013/05/28/busin ... d=all&_r=0

Rick wrote:

Say goodbye to that $500 deductible insurance plan and the $20 co-payment for a doctor’s office visit. They are likely to become luxuries of the past.

Then blame — or credit — the so-called Cadillac tax, which penalizes companies that offer high-end health care plans to their employees.

Although the tax does not start until 2018, employers say they have to start now to meet the deadline and they are doing whatever they can to bring down the cost of their plans. Under the law, an employer or health insurer offering a plan that costs more than $10,200 for an individual and $27,500 for a family would typically pay a 40 percent excise tax on the amount exceeding the threshold.

Guess it depends on what kind of policy you have.

http://www.nytimes.com/2013/05/28/busin ... d=all&_r=0

There is nothing in your statements or quotes above that indicate that ANYONE is currently paying an excise tax (or any tax) on premiums (or a total value of a health insurance plan) at the present moment... like Arlen claimed above.

On the flip side of that... I do find the information in the NYT article rather interesting... and a revelation. I read the whole 1200 or so pages of the draft ObamaCare bill about two weeks before it was voted on... and I didn't see anything in the bill like that. Then again, with in two weeks from the time that I read it and they voted on it... the total pages of the bill increased by almost a thousand pages.

If the provision for taxing premiums over a certain threshold does become law in 2018... I find that disturbing. I would like to know the why the government who seems so interested in quality health care for EVERYONE, would even think of taxing someone because they are in the position to afford that care... or works for an employee who can offer that level of care?

I guess Nancy was right... we'll know what's in the bill AFTER they pass it.