What’s rich? And at what level of rich should the top tax rate kick in? According to Forbes, today, the top federal tax rate of 35% begins at taxable income of just $379,150 for couples filing jointly. An ongoing attempt by Senate Democrats to impose a surtax on income over $1 million stands little chance of overcoming Republican opposition and Warren Buffett’s proposal for an even higher rate on income above $10 million is, in today’s Congress, just a fantasy.
The states, by contrast, have been pushing upward the definition of rich for tax purposes. Indeed, a deal announced Tuesday by Democratic New York State Gov. Andrew Cuomo, Republican Senate Majority Leader Dean Skelos and Democratic Assembly Speaker Sheldon Silver would lift the income level at which the state’s highest tax kicks in from the current $500,000 per couple to $2 million per couple, while providing a significant rate cut to those below the $2 million level.
Cuomo had promised to let a temporary 2009 rate hike from 6.85% to 8.97% on income over $500,000 expire, as scheduled, at the end of 2011. The new deal does allow the 2012 rate to drop all the way back to 6.85% on income below $2 million. But for income above $2 million, the rate will be shaved by just fractions, to 8.82%. The new top rate, assuming the deal goes through, would be in effect for 2012, 2013 and 2014.
The New York pact was announced just a day after California Democratic Gov. Jerry Brown filed a ballot initiative…
Read more at http://www.forbes.com/sites/janetnovack/2011/12/07/new-york-decides-it-takes-2-million-to-be-rich-for-tax-rates-that-is/
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