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Despite deal, taxes on most Americans will go up - Fox News Posted: 02 Jan 2013 09:12 AM PST Washington – Taxes for most Americans will still go up this year despite declarations from President Obama and others touting Tuesday night's fiscal crisis deal as a victory for middle-class workers. At the same time, tax relief that was included in the package comes at a cost -- contributing, along with new spending, nearly $4 trillion to the deficit over the next 10 years, adding to the nation's more than $16 trillion debt. But there will be federal tax hikes in 2013. That's because the legislation pushed through the Senate and House on Jan. 1 does nothing to prevent a temporary cut in the Social Security payroll tax from expiring. That means, under the agreement brokered by the White House and Senate Republicans, 77 percent of American households will be forced to fork over higher federal taxes in 2013. Households making between $40,000 and $50,000 will face an average tax increase of $579 in 2013, according to the Tax Policy Center's analysis. Households making between $50,000 and $75,000 will face an average tax increase of $822. For most families, the increase will end there. But for top earners, taxes will get considerably higher this year. The package passed by both chambers extends most the Bush-era tax rates for individuals making less than $400,000 and married couples making less than $450,000 -- but lets them lapse for income above those thresholds. The new tax package would increase the top income tax rate from 35 percent to 39.6 percent. Investment taxes would also increase for people who fall in the new top tax bracket, from a rate of 15 percent to 20 percent. High-income families will also pay higher taxes this year as part of Obama's 2010 health care law. As part of that law, a new 3.8 percent tax is being imposed on investment income for individuals making more than $200,000 a year and couples making more than $250,000. Together, the new tax package and Obama's health care law will produce significant tax increases for many high-income families. For 2013, households making between $500,000 and $1 million would get an average tax increase of $14,812, according to the Tax Policy Center analysis. Households making more than $1 million would get an average tax increase of $170,341. "If you're rich, you're almost certain to get a big tax increase," Roberton Williams, a senior fellow at the Tax Policy Center. Obama pushed hard to enact the payroll tax cut for 2011 and to extend it through 2012. But it was never fully embraced by either party, and this time around, there was general agreement to let it expire. Social Security is financed by a 12.4 percent tax on wages up to $113,700, with employers paying half and workers paying the other half. Obama and Congress reduced the share paid by workers from 6.2 percent to 4.2 percent for 2011 and 2012, saving a typical family about $1,000 a year. The deal passed Tuesday night only tees up a new round of congressional battles in a matter of weeks over the debt ceiling and automatic spending cuts that would largely hit the Pentagon -- the latter provision was delayed by two months as part of the deal. Democrats are likely to continue pushing for tax hikes as part of those debates, while Republicans are demanding spending cuts and entitlement reform. The Associated Press contributed to this report. | |
Should government compensate Newtown's victims and their families? - Los Angeles Times Posted: 02 Jan 2013 09:05 AM PST
A Connecticut lawyer has withdrawn -- for now -- a $100-million lawsuit against the state of Connecticut on behalf of a 6-year-old survivor of the Newtown school shooting in which 20 young children were killed. According to the Washington Post, New Haven-based attorney Irving Pinsky might resubmit the claim after evaluating new evidence. The basis of Pinsky's claim is that the state Board of Education, Department of Education and education commissioner failed to take appropriate steps to protect children at the Sandy Hook Elementary School from "foreseeable harm" and had failed to provide a "safe school setting." Pinsky's client, according to the complaint, "has sustained emotional and psychological trauma and injury, the nature and extent of which are yet to be determined." The filing of this lawsuit will be attacked -- understandably -- as an extreme manifestation of American litigiousness and blame-shifting. But equally dubious is the Connecticut state attorney general's suggestion of an alternative form of "redress." According to Reuters, a spokesman for Atty. Gen. George Jepsen said that a response by the U.S. Congress and the Connecticut state Legislature would be "more appropriate." It isn't clear what Jepsen had in mind, but it sounds as if he was floating the idea of some sort of compensation scheme for the victims and survivors of the shootings -- analogous to the $7 billion in payments Congress approved for the families of the victims of 9/11. (The 9/11 program did have an ulterior purpose: sparing the airlines whose planes were hijacked from litigation. Presumably families that received payments from a Newtown fund would agree not to sue the state or the school system.) I always thought the 9/11 program represented a triumph of emotion over principle. Why should relatives of 9/11 victims, as opposed to, say, the families of people killed in car crashes or as the result of an illness, receive compensation? Ken Feinberg, special master of the September 11th Victim Compensation Fund, acknowledged in an interview with CNN in 2011 that the 9/11 payouts were an aberration. "Bad things happen to good people every day in this country and it's not part of our heritage for the taxpayer to be an insurer," Feinberg said. "To give these people, on average, $2 million tax free flies in the face of American history." The same would be true of a government-created Newtown fund. ALSO: Letters: Gay marriage's day in court |
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