Under Obama, a $4000 tax on the middle class

I write this on October 30, 2012. As of today, to the best of my knowledge, under the Obama administration, the so-called “Bush tax cuts”, which have been in effect for ten years, are set expire January 1st, 2013 and will not be renewed by this administration. Therefore, any related tax increase is, for lack of a better term, Obama’s fault. This is for two reasons: Obama has extended the Bush tax cuts for two additional years, when he could have let them expire. Obama was willing to extend these cuts for the middle class, but not for the wealthy. He either refused to extend the cuts (or make them permanent) because it included the wealthy. He either could have swallowed the bitter pill to extend them and be bi-partisan, or used his leadership/debate skills to convince Republican leaders (or used community organization skills to have constituents do it) to let the wealthy tax cuts lapse. Either way, he failed, and the resulting tax hike is fittingly under his term. So, since these tax measures occurred under Obama’s presidency, it is fair to attribute any increase in taxes (regardless of when they will be realized) to him, and any calculations using the expiring Bush tax cuts are fair and accurate. Furthermore, Obama’s key piece of legislation was the “Affordable Care Act” (Obamacare), which did indeed raise taxes in their own right. Using these new taxes in calculations is fair game, as well. Calculations Given a married family of four (two dependent children, both minors) is an acceptable definition of the word “family”. The median household income for this criterion is $62,273, which will is an acceptable definition of the enigmatic term “middle class”. . http://www.census.gov... Ergo, these are the following tax increases that are imposed on the middle class family earning $62,273: $870 Bottom bracket (10% à 15%) $1000 child tax credit ($1000 à $500) $560.457 Obamacare additional Medicare tax of 0.9% $2085 Individual mandate $4515.457 Total new taxes under Obama The Bush tax cuts created a new bottom bracket of 10%. With its expiration, this bracket (and the income it taxes) will revert back to 15%; the upper limits were unaffected. So, this tax increase is the difference a married filing jointly couple would pay on the first $17,400 of taxable income between the two brackets, a total of $870. Note: this $870 is the same on any married couple whose taxable income is $17,400 or more, regardless of income level. . http://taxes.about.com... The Bush tax cuts also increased the child tax credit from $500 to its current $1,000 over time; it was phased into this amount, but there is no phase back. So, if you have two kids, you lose $1,000 in tax credits. Since tax credits are matched dollar for dollar (as opposed to deductions), this $1,000 loss of credit is a tax increase of $1,000 because they will have to pay $1,000 more than they otherwise would have. Note: a tax credit does not affect your tax liability (which is based on taxable income), but it does reduce the amount owed. . http://www.house.leg.state.mn.us... Starting January 1, 2013, the Obamacare additional payroll tax will take effect. Payroll taxes are currently 2.9% Medicare and 12.4% FICA (both taxes split between employee and employer, and FICA is currently 2% less for employees as a holiday for this and last year due to the stimulus). However, Obamacare adds a 0.9% payroll tax on only the employee. This is not shared by employer, and there is an upper limit, like FICA, but higher (the regular Medicare tax has no limit). So, Obama raised taxes on all working people by 0.9%, which translates to the middle class family as $560.457. . http://www.irs.gov... Lastly, there is the individual mandate, which will fully take into effect in 2016, but enacted under this president. It will cost any adult who is not insured AT LEAST $695, possibly more. In our hypothetical, there are two adults and two children (whose penalty is reduced 50%), so this is a tax of AT LEAST $695 x 3 = $2,085. . http://abcnews.go.com... Conclusion These taxes combined are more than $4,000, all under Obama. There are additional tax effects, like the tax on medical supplies, marriage penalty resurgence, payroll tax holiday expiration, and various deductions (like mortgage insurance and the increased floor for medical expenses); however, these four big tax effects are easiest to visualize, are most likely to occur, and simple to prove without complex tax discussion/situations. Romney stating that “under Obama, middle class families’ tax burden raised $4,000” is a fair and accurate figure.