IRS ADJUSTS PAYROLL WITHHOLDING TABLES BECAUSE OF RAMPANT INFLATION
They are burning your money.
George Wilson Adams CPA MBA
October 28, 2022
We Now Have the Highest Inflation in 40 Years
Almost everyone knows our economy is suffering from historic levels of inflation. Food and gas especially have gone up significantly in price. Where does inflation come from? As a CPA and MBA I studied economics in detail. Economics is actually a science and is one of the five Nobel prizes awarded each year.
Government is the cause of inflation. In every case in history, when a government prints too much money relative to the size of the economy, then inflation begins. This is a law of economics and a fact of history.
According to a U.S. Labor Dept. report published on October 13, 2022, the official inflation rate nationwide is 8.2%. This number is merely an average and an abstraction. The day to day reality for people is that price increases for many common products have increased by far more. Here is the annual increase in price for many common foods:
Chicken up 27.9%
Coffee up 27.8%
Potatoes up 14.5%
Dry Beans up 15.5%
Bacon up 16%
Ground Beef up 16.9%
Orange Juice up 19.6%
Whole Milk up 20.2%
Grade A eggs up 76.2%
See:
https://financebuzz.com/inflation-food-prices
Ironically, one of the few things that have declined in price in many areas is the cost of illegal drugs, including deadly fentanyl. This outrageous fact is the direct result of the deliberate collapse of our southern border, orchestrated by the criminal regime in Washington D.C.
See:
https://bedrockrecoverycenter.com/street-price-of-drugs/prescription/fentanyl/
The IRS Responds to Inflation
By law the IRS is required to adjust payroll tax withholding tables based on prevailing inflation. These adjustments are made near the end of each year and take effect on January 1 of the following year. There are seven income tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. The higher your income the higher the tax rate you will be charged.
The effect of this IRS change will be to increase take home pay for employees starting January 1, 2023. Of course this is NOT a real increase in your income, which will continue to be eaten away by inflation. You will need this extra money to try to keep up with inflation. However, because salaries and wages for most people are not rising equally with inflation, the truth is that even with this IRS adjustment working people will continue to fall further and further behind.
New Tax Brackets for 2023
According to recently released IRS information, here are the new inflation adjusted tax brackets for 2023:
The Standard Deduction claimed by approximately 90% of taxpayers will increase to $13,850 (single filers) and $27,700 (joint returns.)
"Inflation is taxation without legislation."
Milton Friedman (Nobel Prize winner in economics)
George Adams
Certified Public Accountant Master of Business Administration
Tel: (207) 989-2700 E-Mail: GeorgeAdams@IntelligenceForRent.com
450 South Main Street: The HQ of IQ
Brewer, Maine 04412-2339
©2015 Copyright George Adams CPA MBA. All Rights Reserved.
