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View Diary: House broken: How the GOP legislative machine turned into a doomsday device (176 comments)

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  •  Math (1+ / 0-)
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    dfe

    2012:

    Gross: $40000
    Less personal exemption: -$3800
    Less standard deduction: -$5950
    Gives taxable income: $30250

    Tax:
    First $8700 taxed at 10%: $870
    Remainder taxed at 15%: $3232.50
    Total: $4102.50

    2013 after the cliff:

    Pre EGTRAA (first Bush tax cut) tax rates (tax year 2000):
    Personal exemption $2800
    Standard deduction $4400
    First $26250 taxed at 15%
    Remainder taxed at 28%

    The monetary values for all four items above will be indexed for inflation.  As far as I know, nothing done since 2000 has affected the personal exemption and standard deduction, and indeed both 2012 figures are 35% more than their 2000 equivalents.  

    Again as far as I know, the IRS has not published updated figures for personal exemption and standard deduction for 2013.  CCH, a tax research service, makes the estimate below.  Applying the same (admittedly rough) correction to the bracket limits gives

    Gross: $40000
    Less personal exemption: -$3900 (1.39x 2000 figure)
    Less standard deduction: -$6100 (also 1.39x 2000 figure)
    Gives taxable income: $30000

    Tax:
    First $36487.50 taxed at 15%: $4500 (36487.5 = 26250*1.39)

    Tax increase is $397.50, or 10% more than in 2012.

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