Obama Promises Shriveling Like the Cheapest of Suits
And this news presumably comes as no surprise to anybody with an ounce of intelligence.
According to recent info released by the nonpartisan Tax Policy Center, the top 1 percent of U.S. taxpayers would pay 67 percent of the higher taxes called for in 2023 under Obama’s recent budget proposals. Households making as little as $30,000 annually would pay some higher taxes. Households making between $500,000 and $1 million would pay an average of $13,474 in additional federal income taxes.
Recall that Obama’s “plan” calls for raising something like $1 trillion more over the next decade. Top earners (often referred to, colloquially, as the “producers” among us) would be subject to a minimum tax rate of 30 percent, limits on their deductions and an increase in the estate tax rate to 45 percent from 40 percent.
Remember this the next time you hear Obama condescendingly refer to the need for the wealthiest among us to pay “just a l’il bit more.”
In commenting on the report, Bloomberg observes that one of the sleepers in Obama’s most recent proposition (changing the way in which inflation is measured and the way in which such change would affect tax rates) “would break the president’s campaign promises to prevent tax increases for married couples making less than $250,000 a year and individuals making less than $200,000.”
Under the circumstances, therefore, is it any wonder that a recent Gallup survey found that while 55 percent of Americans regard the income taxes they pay as “fair,” such is the lowest percentage measured since 2001?
Gallup has been measuring this sense amongst taxpayers since the 1940s. From 1943 through 1945, few Americans complained about their taxes, with an average of 87 percent indicating their feeling that their tax burden was fair.
After the war, the percentage dropped significantly (to 61 percent in 1946), and since the late 1990s (when Gallup resumed annual surveys on the question) the percentage has generally hovered in the high 50s to the 60 percent neighborhood.
So you’ve got to look under every rock for ways to reduce your burden. While truly “big bucks” aren’t involved, consider hiring your kids in your business – every little bit helps.
F’rinstance, say you’re self-employed and in the 33 percent bracket for 2013, and you identify some chores which could be legitimately performed by your 17 year old, for which you pay him $6,100. Assuming he has no other income, he pays no income tax on this amount (because it’s sheltered by his standard deduction) and you save over 2,000 shekels in the form of this deduction. Further, “employment” for FICA tax purposes doesn’t include services performed by a child under 18 working for Mom and Dad! Not a bad deal. And better yet, if Junior doesn’t need the money (or at least maybe doesn’t need all of it), he can fund an IRA up to a maximum of $5,500, thus deferring tax on all of the earnings and growth until the funds are withdrawn! Putting it another way, if Junior does fund the maximum IRA, he can earn up to $11,600 without incurring any Federal income tax liability!
Give it some thought!
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA 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., with offices in Incline Village and Reno. He may be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.