White House Unveils Tax-Rate Details (hikes on couples with $235K of taxable income)

Wall Street Journal ^ | May 12, 2009 | John D. McKinnon

[reaganaut1]

The Obama administration provided more details on the scope of its tax proposals, showing the impact of rate increases on higher earners would hit couples with about $235,000 of "taxable income," or income after deductions and exemptions.

The administration also revealed new details of its initiatives to shut down offshore tax shelters used by some investors and businesses, and to raise taxes on the overseas earnings of many U.S. multinationals.

During the presidential campaign, Barack Obama said he wouldn't raise taxes on couples earning less than $250,000 but didn't give a precise definition of the term. On Monday, the administration published more details of how exactly the rate increases, if approved by Congress, would be implemented.

The Treasury Department's description, known as the "green book," showed that the new 36% rate would apply to an adjusted gross income of $250,000 "less the standard deduction and two personal exemptions." Those items effectively represent the minimum that a couple could subtract from adjusted gross income, officials said. A senior administration official estimated that that produces taxable income of about $235,000.

...

Doug Holtz-Eakin, a former top adviser to Republican presidential candidate John McCain, said Monday's announcement might sound like backtracking. "The truth is it just wasn't clear," he said. "But the pledge was if you were making $250,000, you're safe. This doesn't sound exactly consistent with that."

But a senior administration official said the $250,000 threshold always referred to AGI. Another official defended the implementation of the proposal as "very conservative."

...

Administration officials also defended a related plan to reduce the value of deductions for people with AGI of $250,000 and up, as a way to help pay for the cost of overhauling the health-care system.

[BillM]

I would think that people will opt to take more vacation as opposed to SALARY. They will spend more family time, or do odd jobs in the CASH economy. It’s a real shame there is no way to go long on cash economy and short on government revenues.

[3catsanadog]

And, if I recall correctly, Obama promised not to increase taxes on 95% of Americans THIS YEAR. Next year, he'll raise taxes through the roof on everybody.

[VTenigma]

Bingo, we have a winner. The VT model

[MudPuppy]

I’m already seriously considering cutting my hours back or staying home to watch my grandson...it’s looking better all the time.

[DoughtyOne]

I know of a person who lost the exemption or his children on his tax return this year, because the family income exceeded $110k.

They used to get thousands per child, and it was reduced to a little over $100 from what I am told.

Doesn’t sound like the cut-off is $230k.

Par for the course if this is true.

[mojitojoe]

Can he stop Americans from moving overseas? If you see that, a dictatorship is in the offing.
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He tries that I can assure you I will go out in a BLAZE of glory. We already have a home outside the US ready and waiting. The furniture is due to arrive next week. Money moved there. Utilities all turned on, pool filled, we are ready. If it settles down here, we can always rent it when we aren’t there but at least we have our out if or when the Communists fully take over.

[mojitojoe]

0’s not-so-dirty-secret is that EVERYONE will have to be taxed at confiscatory rates,
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Has it occurred to anyone that they can tax all they want... what if people just refuse to pay them?? Millions refusing to pay would bring the government to it's knees. You want to see change, wait until that happens. Wait until people have had enough. I have a hunch that is already happening. Look at what they collected last year at this time, compared to this year.

[OafOfOffice]

The administration also laid out plans to attack several offshore tax shelters, including one that aims to help investors receive corporate dividends without incurring U.S. withholding tax.

Do you think they warned Bill Clinton and Al Gore to get their money out?

But a senior administration official said the $250,000 threshold always referred to AGI. Another official defended the implementation of the proposal as "very conservative."

People in Manhattan, Chicago, some areas of Los Angeles and the bay area are not wealthy with this income level. Rent for a apartment in LA can be 2500.00 for nothing much. Bay area is about $2000.00 for every 500 square foot of rental space.

But if you have money then they can't control you.

[OafOfOffice]

I read if single it is the same but that was awhile ago. They said it did not pay to get married under obama’s tax proposal.

[antiRepublicrat]

I know it's popular to criticize everything he does, but I ALWAYS assume taxable income whenever someone is talking about taxes.

Okay then, base it on $250K of taxable income.