Aren’t Your Taxes High Enough Already?

December 17, 2009

            Some of you may think they are not. If that is you, get on the planet. And after you land, consider a recent report by the Tax Foundation.

            Their numbers suggest that Federal income tax rates would have to nearly triple (that’s with a “T”) across the income spectrum if Congress were to close the deficit in fiscal year 2010. The Foundation’s recent report (October, 2009) suggests that instead of taxing joint filers with rates ranging from 10% to 35%, tax rates would have to start at 27.2% and reach to as high as 95.2%.
            Nice prescription for economic growth, don’t ‘ya think? Good recipe for job creation, right? Does Obama have a comment?
            “Federal government spending levels are so high that even if policymakers were willing to stop debt-financing government services, the Federal tax system in its current form wouldn’t be able to raise that much,” notes Tax Foundation Director of Policy and Communications, Bill Ahern, author of the report.
            “If high-income people had to pay a Federal tax rate over 90%, plus state and local income taxes and other taxes, total tax rates would be well over 100% for many households.”
            Nice.
            The Foundation report concludes that if the Feds were determined to close the 2010 deficit, even resorting to higher income tax rates across the board, the average (Federal) tax payment of someone making between $75,000 and $100,000 would jump from $7,055 to $20,515!!! Taxpayers with adjusted gross income over $1 million would see their tax bills climb from $800,000 to nearly $2 million.
            And for those of you with audit risks hanging out there, consider what country you live in. Are you worried about the IRS? And the Revenooers alone?
            Maybe so, but consistent with the Obama “one world” philosophy, you had better get a little more circumspect.
            We hear from Bloomberg.com that the IRS is now working with tax collection agencies in other countries with respect to how to proceed in conducting joint audits of multinational corporations.
            Now it’s maybe corporations; tomorrow it may be we and thee.
            Quoth IRS Commish Shulman, “We are in the very early stages of looking at these protocols,” at a recent conference in D.C..
            And not to be outdone, the Deputy Commish, Barry Shott was heard to say that “It’s new. I think you’re going to see more of it.”
            Big Brother is always watching……
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your tax advisor regarding the implications to your own particular situation.
            Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd. He may be reached at 831-7288, and welcomes comments below.

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