The U.S. Department of Commerce Bureau of Economic Analysis January 2013 report on personal income has been released. It shows a drop of 3.6% in personal income, or $505.5 billion dollars. Worse yet is that real disposable income, or income we get to spend on things we want as opposed to needs, dropped 4.0%. That’s over half a trillion sucked out of the economy for anyone keeping track. You can read the report here – http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm
Scroll down to the other personal income section and you’ll find this under contributions for government social insurance.
Contributions for government social insurance — a subtraction in calculating personal income — increased $126.7 billion
in January, compared with an increase of $6.3 billion in December. The January estimate reflected increases in both
employer and employee contributions for government social insurance. The January estimate of employee contributions for
government social insurance reflected the expiration of the “payroll tax holiday,” that increased the social
security contribution rate for employees and self-employed workers by 2.0 percentage points, or $114.1 billion
at an annual rate. For additional information, see FAQ on “How did the expiration of the payroll tax holiday affect
personal income for January 2013?” at http://www.bea.gov. The January estimate of employee contributions for government social
insurance also reflected an increase in the monthly premiums paid by participants in the supplementary medical insurance
program, in the hospital insurance provisions of the Patient Protection and Affordable Care Act, and in the social
security taxable wage base; together, these changes added $12.8 billion to January. As noted above, employer contributions
were boosted $5.9 billion in January, so the total contribution of special factors to the January change in contributions
for government social insurance was $132.8 billion.
You’ll note that the report mentions the .8% increase in Medicare contributions thanks to Obamacare. The 2.0% increase in social security withholding was well-publicized, but the Obamacare Medicare increase? Not so much.
Much to the chagrin of many a democrat, they are feeling those tax hikes they thought were only going to the rich. Obama signed off on the deal to avoid the fiscal cliff by raising tax rates on the wealthy to raise a projected $600 billion in revenue. Only one problem. Obama turned down the GOP offer of $800 billion in new revenue. Why? A sense of fairness. Obama wanted the higher tax rate rather than closing tax loopholes so he settled for $200 billion less.
You remember the Obama sense of fairness, don’t you? He brought it up years ago in his interview with ABC’s Charlie Gibson concerning the capital gains rates increase.
Fairness aside, Obama then went after the tax loophole revenue as a way to avoid sequestration. That didn’t happen, but you can be sure we’ll hear it again later this month when the fear-mongering really ramps up over the expiration of the continuing resolution.