Tag: Withholding taxes

The Tax Man Cometh Again

Remember, as you read through these stories, the cardinal rule of government: everything you have is theirs. If you have such a thing as “take-home pay” it’s only because of their generosity in allowing you to take it home. Sort of the way a highwayman might let you keep enough bread to feed your family while stealing everything else.

First, Chicago. The city of Chicago has figured out what every economist knows: when you tax something, you get less of it. This is why, for example, paying for healthcare reform with cigarette taxes never works. People smoke less in response and revenues fall below expectations. Taxes and fees on cars and gasoline are driving some people to ride bicycles. This is a good thing, right? Less fossil fuel use, more people getting exercise. The only losers are people like me who wear out their brake pads trying not to run over these hippie fruitcakes when they cut across a road all of a sudden with NO consideration for anyone else and NO concept of how much momentum a car has and there’s a Goddamn bike lane right there and we paid taxes to build that thing so why don’t you use it, you self-important piece of …

Sorry, lost my train of thought there.

Anyway, Chicago is floating the idea of taxing bikes.

A city councilwoman’s recent proposal to institute a $25 annual cycling tax set off a lively debate that eventually sputtered out after the city responded with a collective “Say what?” A number of gruff voices spoke in favor, feeding off motorists’ antagonism toward what they deride as stop sign-running freeloaders. Bike-friendly bloggers retorted that maybe pedestrians ought to be charged a shoe tax to use the sidewalks.

Chicago is by no means the only place across the U.S. tempted to see bicyclists as a possible new source of revenue, only to run into questions of fairness and enforceability. That is testing the vision of city leaders who are transforming urban expanses with bike lanes and other amenities in a quest for relevance, vitality and livability – with never enough funds.

Two or three states consider legislation each year for some type of cycling registration and tax – complete with decals or mini-license plates, National Conference of State Legislatures policy specialist Douglas Shinkle said. This year, it was Georgia, Oregon, Washington and Vermont. The Oregon legislation, which failed, would even have applied to children.

Don’t mention the shoe tax, guys. They’ll take it seriously.

Second story: you remember how our budget deficit problems result from not being able to raise taxes? Well, welcome to 2014 when a slew of new taxes will be heading your way.

The new taxes and fees include a 2 percent levy on every health plan, which is expected to net about $8 billion for the government in 2014 and increase to $14.3 billion in 2018.

There’s also a $2 fee per policy that goes into a new medical-research trust fund called the Patient Centered Outcomes Research Institute.

Insurers pay a 3.5 percent user fee to sell medical plans on the HealthCare.gov Web site.

Americans also will pay hidden taxes, such as the 2.3 percent medical-device tax that will inflate the cost of items such as pacemakers, stents and prosthetic limbs.

Those with high out-of-pocket medical expenses also will get smaller income-tax deductions. Americans are currently allowed to deduct expenses that exceed 7.5 percent of their annual income. The threshold jumps to 10 percent under ObamaCare, costing taxpayers about $15 billion over 10 years.

Then there’s the new Medicare tax.

Under ObamaCare, individual tax filers earning more than $200,000 and families earning more than $250,000 will pay an added 0.9 percent Medicare surtax on top of the existing 1.45 percent Medicare payroll tax. They’ll also pay an extra 3.8 percent Medicare tax on unearned income, such as investment dividends, rental income and capital gains.

Oh, and this morning, I found out about this little gem:

The new year is time for change, even in the service industry. Starting January 1, the IRS will classify automatic gratuities as service charges that are taxable as regular wages and subject to payroll tax withholding. That might sound like a bunch of arcane tax law mumbo jumbo, but what it means is that restaurants have to treat those tips like regular wages.

Typically, the IRS left it up to the waiter or tipped employees to declare that money. But with this new change the waiter won’t see those “tips” until payday—instead of the end of the shift. And restaurants will have to withhold federal income, Social Security and Medicare taxes on that money, too.

What it means for the diner is that those automatic 18% gratuity charges on tables of 6 or more may well be a thing of the past. The addition has been added onto large parties to ensure that servers are paid for catering to a large group.

That doesn’t mean you should use this an excuse to start stiffing people. Remember, the minimum wage laws here in the states for tipped workers is still at a shocking $2.13 an hour. And, as evidenced by this video, a few extra bucks means a lot to the service workers of America.

What surprises me — actually it doesn’t surprise me — is how much this stuff is going to hit the middle and working classes. Cycling taxes, insurance taxes, tip taxes — these will hit hardest on young people, the working poor and the middle class. This is a running theme in Obama’s America: the plebs get screwed; the elites pat themselves on the back for caring so much. Even when the elites do bad things, they are never punished for their misdeeds, not to the extent the rest of us would be for smoking a joint or chewing a pop-tart into the shape of a gun. It’s enough to make you think the system is broken beyond repair.

Enjoy your new taxes.