Claims about 2015 Tax Rates

All throughout 2014 and beyond, a chain email and viral post bounced around inboxes and social media about a “new” set of tax increases set to take effect on January 1, 2015:

Reminder for those who forgot or for many that didn’t know

Here is what will happen on January 1, 2015 :

Top Medicare tax went from 1.45% to 2.35%

Top Income tax bracket went from 35% to 39.6%

Top Income payroll tax went from 37.4% to 52.2%

Capital Gains tax went from 15% to 28%

Dividends tax went from 15% to 39.6%

Estate tax went from 0% to 55%

Remember this fact:

These taxes were all passed only with democrat votes, no republicans voted for these taxes.

These taxes were all passed under the Affordable Care Act, aka Obamacare.

If you think that it is important that everyone in the U.S. should know this, pass it  on. If not, then delete it.

These same false and misleading claims enjoyed a resurgence in 2016 just before the United States’ presidential election and again in 2018, just ahead of the midterms:

Many of the tax rates listed in this viral message were set under the bipartisan American Taxpayer Relief Act of 2012, or ATRA — not the Affordable Care Act (also called the ACA or Obamacare.) ATRA was passed after the 2012 presidential election to prevent a federal government shutdown, and it took effect on January 1, 2013,  not at the beginning of 2014 or 2015 as repeatedly claimed.

A brief look at the rest of the claims shows that although the numbers in each iteration are more or less unchanged, they remain as untrue as ever.

Top Medicare tax went from 1.45 percent to 2.35 percent.

Fiction. The claim that this is a “new” tax increase for 2015 is false. The top Medicare tax rate was set at 2.35 percent in 2013. Established under the ACA, the rate applies to high-income individuals ($200,000/individual, $250,000/couples), as the Boston Globe reported in 2013:

The wage thresholds of $200,000 and $250,000 are not inflation adjusted. As such, this law will apply to more and more taxpayers over the years.

Top income tax bracket went from 35 percent to 39.6 percent.

Fiction. Taxpayers in the top income bracket ($400,000/individual, $450,000/couple) won’t see an income tax increase in 2015. The rate was set at 39.6 percent in 2015, the same as in 2013 and 2014. Top earners paid 35 percent in 2012 — before the bipartisan ATRA took effect.

As of 2018, when these claims came around yet again before the midterms, the tax bracket for top earners was 37 percent.

Top income payroll tax went from 37.4 percent to 52.2 percent. 

Fiction. The combined income and payroll tax rate went from 37.9 percent to 42.5 (not 52.2) percent on January 1, 2013 under the healthcare law.  However, that figure excludes state taxes that are factored in separately and which have nothing to do with the ACA, meaning that without a detailed state-by-state breakdown, no number would be accurate.

Capital gains tax went from 15 percent to 28 percent.

Fiction. Capital gains taxes did not jump 13 percent in 2015. In 2012, federal capital gains taxes were 15 percent, which was historically low. The rate jumped to 20 percent on January 1, 2013, under the bipartisan ATRA. Top earners ($200,000/individual, $250,000/couple) face an additional 2.3 percent increase because of ACA’s net income surtax, Forbes reports. That left the federal capital gains tax rate at 23.3 percent.

However, states levy additional capital gains taxes. Overall, with state taxes factored in, the average capital gains tax rate in 2014 was 28.7 percent, the Tax Foundation reports.

The eRumor’s claim is misleading because it excludes state capital gains taxes from the 15 percent figure. It also gets the timing and the amount of the increase wrong.

Dividends tax went from 15 percent to 39.6 percent. 

Fiction. The bipartisan ATRA capped the marginal tax rate at 20 percent on dividends income. A Medicare tax levied under the ACA added another 3.8 percent for high-income individuals. That means the rate will be no more than 23.8 percent.

Estate tax went from 0 percent to 55 percent. 

Fiction. This claim is completely false. The maximum estate tax rate was capped at 40 percent in both 2013 and 2014. In 2011 and 2012 it was capped at 35 percent, the Tax Foundation reports.

Finally, the missive contends that “not a single Republican” voted for these imaginary tax hikes. Assuming that it was written in good faith about the American Taxpayer Relief Act of 2012, that is demonstrably untrue; without the good faith assumption, it can be regarded not as misinformation, but disinformation — in other words, a lie.