The prices are slightly lower compared to December 2021.
Gas prices are on the rise. The Fed still believes that increasing interest rates will put an end to inflation. The recent inflation reports were a bit positive and relief for Americans. That was what President Biden said. The U.S. president described the results of the last inflation report as “positive news” and added that inflation is shrinking.
That’s according to the Bureau of Labor Statistics. In December, the U.S. saw the fastest and highest inflation rate since 1982. For example, the consumer price index rose by 7%, the fastest increase on an annual average. These increases affect all the economic segments and areas, including tech, industrials, manufacturers, health and care, and more.
December consumer price index results
- Core CPI increased by 5.5% a year over year
- Shelter costs increased by 0.4% compared to the previous year
- Used vehicle prices increased by 3.5% compared to Novembers reports
- Oil decline by 2.4% from the previous month
- Gasoline fell by 0.5%
Job claims are increasing day by day, businesses struggle to keep up with market demands, and more. It was the worst economic year by all measures. Despite the negative inflation reports, some stocks of the Nasdaq and the S & P 500, are doing well. The report also adds that prices are starting to fall.
Biden added that this decrease is clear evidence that the government’s movements are on the right path. And this is only the beginning; the Federal Reserve has stated that interest rates will begin to rise in March.
Will inflation affect your tax bills?
From an economic perspective, there is a strong relationship between inflation and taxes. It could be positive or negative. However, Texas leads to inflation, and that’s what happened. Due to the pandemic crisis, labor crisis, and short and deep recessions, the government may increase tax bills to cover its losses. While it seems like just a consideration now, it’s worth considering.
As we have seen, the consumer price index hit a new high in December by 7%. It was alarming and things got out. While most stock names are making gains and jumping, in reality, the average American consumer is still underwater.
If the numbers could speak, they would say that these are dangerous times for all of us. By the start of 2022, the IRS took its usual standard measures: it increased the federal income tax brackets and boosted its standard deduction.
In November 2021, the internal revenue services released the tax year 2022 and it was as follows:
The standard deduction for married couples filing jointly for tax in 2022 increased by $800, which made it $25,900. As for single taxpayers and married individuals, the tax in 2022 also increased by $400, to $12,950. As for the personal exemption for the tax year 2022, it remains the same; nothing changes. These are a few examples of how inflation would affect your taxpayers. Things will remain the same if the government can’t control inflation.
For incomes exceeding $215,950 ($431,900 for married couples filing jointly), the tax rate is 35%.
Here are other rates.
- Earnings over $170,050 are taxed at 32% ($340,100 for married couples filing jointly).
- Earnings over $89,075 are taxed at a rate of 24% ($178,150 for married couples filing jointly).
- 22% on earnings over $41,775 ($83,550 for married couples filing jointly).
- 12% on earnings over $10,275 ($20,550 for married couples filing jointly).