Happy New Year. Welcome to Phase Two of tax reform. Ring in the Harmonized Commodity Description and Coding System. Cheer a bigger Social Security tax bite. Sing "Auld Lang Syne" to the days when you could stuff your entire wardrobe and exercise bike into the overhead rack of an airliner.
Quit envying the neighbor who is two tax brackets above you. Beginning today, Jan. 1, 1988, there are only two rates: 15 percent and 28 percent. There were five in the year just past.
The bill you ran up on your credit card to usher in the new year will not be as valuable when 1988 tax time comes around. Only 40 percent of consumer interest expense -- interest on credit cards and personal loans -- will be deductible. It was 65 percent in 1987, down from 100 percent before tax reform.
But if you don't itemize on your tax return, the standard deduction will go up in 1988. That won't put cash into your pocket until you fill out the return next year.
For some people, the new year brings a pay raise. White collar federal workers will get 2 percent more and so will military personnel.
A 4.2 percent cost-of-living increase will show up in the paychecks of Social Security beneficiaries, raising the average monthly check for a retired worker from $492 to $513.
An estimated 3.6 million former federal civilian and military employes also will get an extra 4.2 percent, and so will retired railroad workers and low-income veterans drawing pensions not based on service-connected disabilities.
Others, however, will pay more.
For those on the paying end of the Social Security money machine, the tax rate climbs to 7.51 percent from 7.15 percent. In 1987, the maximum amount of wages on which Social Security tax was withheld was $43,800. That rises to $45,000 this year.
Elderly and disabled people in the Medicare program will be charged $24.80 a month for Part B -- the doctor insurance portion of the program. That's up from $17.90 this year. They also will have to pay $540 for their first day in the hospital, a $20 increase over 1987.
Those aged 65 to 69 and receiving Social Security can earn $8,400 in 1988 without any loss of benefits. The threshold was $8,160. Those under 65 will be able to earn $6,120, up from $6,000.
You will be happy to know about other things that changed into laws, Cinderella-like, at the stroke of midnight:
A strict limitation on how much and what kind of baggage is carried aboard airliners. In general, if it can't be stowed under a seat or in a bin or hung in a closet, don't try. Specifically, check the big stuff.
The Environmental Protection Agency won't allow table grapes to be shipped or imported in 1988 if they contain detectable residues of sulfite compounds. Sulfites are formed from the sulfur dioxide used for more than 40 years to prevent rotting during shipment and storage.
Imports of Chinese-made sweaters, shirts and other clothing and textiles will be limited to a 3 percent increase annually under a new Sino-American agreement.
Here are two things that might have happened in the new year but didn't.
If President Reagan had not signed a bill Thursday some taxes involving airlines would have lapsed in 1988, including a departure tax, an 8 percent tax on airline tickets and levy on general aviation fuel. But he signed.
A new, simplified system of naming items in world trade goes into effect everywhere but in the United States.
The international Harmonized Commodity Description and Coding System covers 5,000 kinds of goods and 9,500 subheadings and has been adopted by 50 countries. It employs codes for everything. Fresh, chilled or frozen sardines will henceforth be known as code 0302.61. Except in the United States, where the trade bill hasn't passed.