Here, the net effect of the federal tax "cut" will be to raise the combined tax burden in some years.
Moreover, nearly the entire bottom 50% of income earners now pay no federal income tax on net as a group.
That adds up to 57.9%, but state income taxes and 1.45% of the payroll tax are deductible from federal income tax, so that reduces their net cost by 5.8% (39.6% of 14.75%).
At least one potential solution doesn't require federal legislation: the "No Net Tax" plan that many business leaders have bandied about.
Thanks to low rates and a pile of tax preferences, it is true that people who earn relatively little are more likely to pay zero federal income tax or even receive net cash benefits through the tax system than those in the top brackets.
These included personal net worth, cash flow and stock option statements, back federal tax returns, W-2s, a company benefits package, various insurance binders, brokerage and 401(k) statements, pension calculations and wills.
In sharp contrast, in that same year, the middle 20% of income earners, the true middle class, paid 2.7% of total federal individual income taxes on net, while earning 15% of before-tax income.
FORBES: Obama's Shocking Fallacies, America's Not-So-Shocking Failures
Instead, they received net payments from the income tax system equal to 3.8% of all federal income taxes.
FORBES: Obama's Budget: The Decline and Fall of the American Economy
Instead, they receive net payments from the income tax system equal to 3.8% of all federal income taxes.
Phil Mickelson at 2007 Barclays Singapore OpenFederal tax law changes beginning in 2013 could further aggravate the situation because of rules applicable to high income taxpayers that could reduce itemized deductions (including the federal state income tax deduction) by as much as 80%, making the net cost of state income taxes more expensive.
FORBES: Phil Mickelson: Is Moving From California a Mistake? Actually, He Should Have Moved Sooner
应用推荐