Important Personal Income Tax Information for Connecticut Employees

Verbatim email from a major CT employer (including one member of our family). My comments are in blue and emphasis in bold.

Effective Jan. 1, 2011 [but passed only a few weeks ago, which is why this email even exists], the State of Connecticut increased the personal income tax rates for certain earning brackets. Beginning Aug. 1, [the CT company] is required to withhold taxes due on your earnings at the new higher rates, as well as collect the back-taxes due on your earnings from Jan. 1 to July 31, 2011 [ex post facto!]. This additional withholding amount will be spread out evenly over the remaining pay periods for 2011 and will be reflected in your pay stubs.

The following provides more details about the income tax changes:

·         New and Increased Marginal Tax Rates
The number of tax brackets has increased from three to six. The new brackets are 3%, 5%, 5.5%, 6%, 6.5% and 6.7%.

·         Phase Out of Lowest Marginal Tax Rate
The 3% tax rate is phased out for taxpayers with Connecticut adjusted gross income:

Over $100,500 filing jointly

Over $56,500 filing single

Over $78,500 filing as head of household

Over $50,250 married filing separately

Income previously taxed at the 3% rate will now be taxed at the 5% rate.

This is only the income tax portion. Use tax and other taxes were increased as well. Taxes are now due on previously non-taxed activities. Read the sorry details at ct.gov.

Analysis:
Our state income tax went up ex post facto!

Analysis #2:
A special note from CT to travelers, vacationers, residents, students, taxi drivers, employers... well, anyone except union members:

"Go away".

Solution:
Are you ready for the great CT exodus?

ObamaCare's Hidden Tax on Health Savings Accounts (HSA)

ObamaCare stealthily increases taxes on HSA (Heath Savings Accounts). The HSA requires a high-deductible health insurance plan. Here's the IRS Guideline:

The Affordable Care Act, enacted in March, established a new uniform standard that, effective Jan. 1, 2011, applies to FSAs and health reimbursement arrangements (HRAs). Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained.

The previous advantage was that health products were paid with pre-tax dollars. Thus, ObamaCare increased taxes on non-prescription items by about 20%. But wait, there's more!

This guideline also taxes doctors. From now on, doctors will be asked to provide prescriptions for over-the-counter medicine. So an (economically flawed and anti-liberty  by the way) effort to control health-care costs now increases either taxes or the mindless duties of doctors.

Who benefits? Let's follow the money to find out:

1. Federal Revenue increases.
2. Subsidizes doctors writing "over-the-counter" prescriptions. But why would a sane person pay for a doctor's office visit just to save 20% on otc products? "Doc, write me a prescription for aspirin... and band-aids."
3. HSA accounts now draw down more slowly, so the HSA custodians have the benefit of a larger "float" balance.  Given that HSA custodians are typically large banks, this could be a carefully planned but hidden back-room deal for the banks.

Conclusion:
ObamaCare distorts the market. Get ready for unintended consequences.