Fact Check: January 1, 2015 payroll income payroll tax went from 37.4% to 52.2%

Claim Analysis: "January 1, 2015 payroll income payroll tax went from 37.4% to 52.2%"

1. Introduction

The claim that the payroll income tax increased from 37.4% to 52.2% on January 1, 2015, has circulated in various forms, often linked to discussions about tax changes under the Affordable Care Act (ACA). This assertion raises questions about its accuracy and the context in which it is presented.

2. What We Know

The claim appears to stem from a misunderstanding or misrepresentation of tax rates related to the ACA. Here are some relevant facts:

• The top income tax bracket increased from 35% to 39.6% in 2013, which is a separate issue from payroll taxes 48.
• The ACA introduced an additional Medicare tax of 0.9% on high earners, which could contribute to confusion regarding total tax burdens 6.
• The combined federal income and payroll tax rate for high earners was reported to be around 42.5% after the ACA changes, not 52.2% 59.
• The IRS documentation from 2014 does not support the claim of a 52.2% rate, instead discussing various tax changes without confirming such a drastic increase 17.

3. Analysis

The claim's credibility is undermined by several factors:

• Source Reliability: Many sources that mention the 52.2% figure, such as PolitiFact and FactCheck.org, label it as exaggerated or misleading. They clarify that the combined rate of income and payroll taxes was misrepresented 46.
• Terminology Confusion: The term "income payroll tax" is not standard and may lead to misinterpretations. The IRS and tax professionals typically separate income tax and payroll tax discussions, which complicates understanding the overall tax burden 3.
• Conflicting Information: Sources like Truth or Fiction and PolitiFact provide evidence that the actual combined rate was lower than claimed. They emphasize that the 52.2% figure likely conflates several tax types without proper context 59.
• Potential Bias: Some sources may have an agenda, particularly those that align closely with political narratives surrounding the ACA. This could influence how tax changes are reported and interpreted 610.

4. Conclusion

Verdict: False

The claim that the payroll income tax increased from 37.4% to 52.2% on January 1, 2015, is false. The evidence indicates that the actual combined federal income and payroll tax rate for high earners was approximately 42.5%, significantly lower than the asserted figure. The confusion appears to stem from a misinterpretation of tax rates and the introduction of additional taxes under the ACA, particularly the 0.9% Medicare tax on high earners.

It is important to note that while the claim is demonstrably false, the discourse surrounding tax rates can be complex and politically charged. The terminology used, such as "income payroll tax," is not standard and can lead to misunderstandings about the nature of tax increases.

Additionally, while the sources consulted provide a strong basis for this conclusion, there are inherent limitations in the available evidence. The interpretation of tax rates can vary based on different contexts and individual circumstances, which may not be fully captured in this analysis.

Readers are encouraged to critically evaluate information related to tax claims and to seek out reliable sources to understand the nuances of tax policy and its implications.

5. Sources

1. Internal Revenue Service. (2014). PDF 2014-0044 - Internal Revenue Service
2. Internal Revenue Service. (2015). 2015 Publication 15
3. Snopes. (2015). What Happened, Quietly, on January 1, 2015?
4. PolitiFact. (2015). What will happen to taxes on Jan. 1, 2015? Chain email gets tax rates ...
5. Truth or Fiction. (2015). Claims about 2015 Tax Rates
6. Jacksonville.com. (2015). Fact Check: Email claiming new Obamacare-related taxes loaded with ...
7. Tax Notes. (2014). IRS Traces Legislative Origins of Tax Rate Changes
8. PolitiFact. (2015). Big tax hikes taking effect? Pants on Fire
9. PolitiFact. (2014). Chain email overstates tax increases, incorrectly says ...
10. FactCheck.org. (2016). New Taxes Aren't New

This analysis highlights the complexities surrounding the claim and the importance of scrutinizing tax-related assertions, especially those that may be politically charged or misinterpreted. Further investigation into specific tax brackets and how they are calculated would be beneficial for a clearer understanding.