Some people say the way to improve the economy is to lower taxes. N.C. State University economist Mike Walden highlights new taxes on the horizon that could cause concern for these people.
“With the new healthcare legislation that was passed a couple of years ago, starting in a couple of years there are going to be a couple of new taxes — primarily on upper-income folks and investors. For example, starting in 2013, the payroll tax for individuals earning above $200, 000 or couples earning above $250,000, that payroll tax is currently 2.9 percent. It’s going to go up to 3.8 percent for those individuals.
“For the same taxpayers, however, there’s going to be a second Medicare tax — a tax of 3.8 percent on investment income. That tax doesn’t exist now.
“So both of these taxes will … come on board in 2013. Both of them are not going to be indexed to inflation, which means over time as people move up the income ladder more people will be subjected to those taxes.
“And we won’t debate whether those are good taxes or bad taxes to have. I think what some economists worry about is the timing. If the economy is still fragile in 2013, then putting on those new taxes perhaps will hold back economic growth. So, we should be aware of that debate.
“We should also be aware and people who are in those brackets should be aware those taxes are online, on board, and they will be coming.”Category: Economic Perspective