Beginning January 1, 2013, payroll taxes were raises for all Americans and increased even more for wealthier Americans. For the last two years the Social Security tax rate was 4.2 percent. In January, this rate was raised to 6.2 percent. The additional 2 percent increase led to an average decrease in take home pay of $1,000.00 per year, per household. In addition, taxpayers making over $200,000.00 for individuals and $250,000.00 for married filing jointly began paying an additional 0.9 percent in Medicare. Interestingly enough, the increase in taxes has not curbed spending in most households.
Americans are spending more and saving less. These purchases are coming in the form of big ticket items such as automobiles and homes. Not to mention the surge in the stock market, Americans are spending money again and it seems that the economy might be getting back on track. In addition, companies added 246,000 new jobs to the economy in February, which shows signs that the economy is moving in the right direction.
Growth in the second half of the year as the fall-out from budget dissipates, paving the way for stronger spending by businesses and consumers, projections show. Gross Domestic Product (GDP) is expected to rise to 2 percent annual pace in the second half of 2013 as opposed to 1.5 percent at the end of 2012.
This is great news for Americans struggling everywhere.
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If you have any questions you can email Craig W. Smalley E.A.
Author of the books: It Starts With an Idea – Tax Tips for Small Businesses, The Ultimate Real Estate Investor Tax Guide, The Complete Guide to the New Tax Law – American Taxpayer Relief Act of 2012, Everything You Wanted to Know about the IRS – Audits, Appeals and Collections, Tax Avoidance is Legal! The Complete Guide to Individual Income Tax, The Complete Guide to the Affordable Care Act’s Tax Provisions, The Complete Guide to Retirement Plans for Small Businesses, The Complete Guide to Estate, Gift and Trust Taxation, The Complete Guide to Hiring an Accountant, The Complete Guide to Subchapter S-Corporations,, and Free Money. All available exclusively on Kindle