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A Project of The Annenberg Public Policy Center

‘New’ Taxes Aren’t New


It’s back! That false chain email about the “new” tax increases that aren’t new is circulating again.

The taxes weren’t new when we wrote about them in 2014 or 2015, and they weren’t “all passed under the Affordable Care Act.” It’s also still false that “not one Republican voted to do these” tax increases. 

As a brief reminder for those who forgot or for many that didn’t know.

Here is what happened, quietly, on January 1, 2016:

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%

Dividend tax went from 15% to 39.6%

Estate tax went from 0% to 55%

A 3.5% Real Estate transaction tax was added.

Remember these facts:

These taxes were all passed solely with Democrat votes.

Not a single Republican voted for these new taxes.

These taxes were all passed in the Affordable Care Act, aka Obamacare.

Only two of the taxes in this year’s version were part of the Affordable Care Act, which passed without Republican support, as the email states. Most of the others were part of the so-called fiscal cliff package that passed with bipartisan congressional support in 2012.

The Medicare tax increase of 0.9 percentage points was in the Affordable Care Act, but it took effect in January 2013. Plus, it applies only to those who earn more than $250,000 for married couples who file jointly, $125,000 for married couples who file separately and $200,000 for all others.

And we assume that the claim that “a 3.5% real estate transaction tax was added” this year is an inaccurate reference to the health care law’s 3.8 percent tax on the net investment income of individuals and couples with high incomes. That tax started in 2013. It’s not a simple tax on real estate transactions, though. Even the National Association of Realtors says that “[t]here is neither a real estate ‘sales tax’ nor a real estate transfer tax under any federal law.”

It’s a new year, but this recycled email is just more of the same. Read our original “False Tax Claims” article for more details.

Correction, Feb. 24: This article originally said that the Affordable Care Act included a “0.9 percent Medicare tax increase.” The tax increase was 0.9 percentage points, from 1.45 percent to 2.35 percent.