Claims about 2015 Tax Rates – Fiction!
Summary of eRumor:
A forwarded email makes a number of claims about tax rate increases that take effect in 2015.
This email makes a number of inaccurate claims about “new” tax rate increases that were set to take effect on January 1, 2015.
Another version of the chain email cited the same tax rate increases and claimed that they were scheduled to take effect on January 1, 2014. Both versions of the email include false and misleading claims.
Many of the tax rates listed in the email were set under the bipartisan American Taxpayer Relief Act of 2012 (ATRA) — not the Affordable Care Act (ACA). 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 these eRumors have claimed.
Let’s take a look at each of the email’s claims:
Top Medicare tax went from 1.45% to 2.35% – Fiction!
The claim that this is a “new” tax increase for 2015 is false. The top Medicare tax rate was set at 2.35% in 2013. Established under the ACA, the rate applies to high-income individuals ($200,000/individual, $250,000/couples), the Boston Globe reports:
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% to 39.6% – 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% in 2015, the same as in 2013 and 2014. Top earners paid 35 percent in 2012 before the bipartisan ATRA took effect.
Top income payroll tax went from 37.4% to 52.2%-Fiction!
The email gets the income payroll tax rate wrong. The rate went from 37.9 percent to 42.5 percent on January 1, 2013, under the healthcare law. However, that figure excludes state taxes that are factored in separately.
Capital Gains tax went from 15% to 28% – Fiction!
Capital gains taxes will not jump 13 percent in 2015. In 2012, federal capital gains taxes were 15%, 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% increase because of ACA’s net income surtax, Forbes reports. That leaves 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% figure. It also gets the timing and the amount of the increase wrong.
Dividends tax went from 15% to 39.6%-Fiction!
This claim is false. 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% to 55%-Fiction!
This claim is 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.
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.