This post is targeted toward those for whom I originally started this blog. Most of them (us) are nowhere near the Obama target of $250K, so the whole raising of tax stuff does not affect us to any great extent.
I want to add a caveat, though, that when the Bush tax cuts are allowed to lapse in 2011, ALL of us with children will get affected, as the (now) $1000 credit per child (as a single example) will be reduced to pre-cut rates ($800).
So anyway, the top marginal rate is 35%. Pretty high, compared to my meager rate of about 15%. Obama plans to raise this to Clinton-era rates of 39.6% Again, that doesn’t seem like much, right? A meager 4.6%? I mean, a paltry $46 per $1000 made is forked over.
Recall though, that these are not the entire number. Check out the real scoop from a tax expert as reported by Michelle Malkin:
… while it may be true that under Obama the marginal effect is only 2, 4, or 6% (depending on what actually passes from his budget), I think the greater effect is the psychological line that Obama has so clearly drawn in the sand. If the tax rates are adjusted so that someone making 250,000 is taxed at 39.6%, if this person is self-employed, they are looking at a total tax rate of up to 61.4% on each dollar over $250,000. [61.4% = Federal Income Tax (39.6), State Rate (up to 10.3% in California), and self-employment tax rate (roughly 11.5% when you take into account your deduction for ½ of the self-employment tax)].
I am a tax accountant, don’t consider myself to be an idiot, and I am right in Obama’s income target range. I will be joining those looking to limit hours worked so as not to enter that 60% territory. Part of the motivation will be the self satisfaction of not contributing to the socialist cause.
So as he taxes those with high income (which by the way is not very high if you live in New York) and those people decide to stop working. So they cut jobs, cut profit, hurt the economy and then force those who cannot realistically cut enough profit to pay an even higher percentage of the tax. Recall that the top 2% of Americans pay the largest portion of the tax burden- now they will pay even more.
The revolution is at hand. Will you be a leader or a follower?