Quote:
Originally Posted by flghtr65
There is a mistake in the video. The tax rate percentage for the highest tax bracket is 39% not 36%. This was made effective 1/1/2013. The Bush Tax cuts in all brackets were due to expire 12/12/31, only tax rate in the top bracket was changed. The other percentages remained unchanged.
The host may be paying 50% in taxes if he lives in a state that has state income tax of 11%. I don't know of any state that has a rate that high. I don't think any one should have to pay 50% on their taxes. The host should move to a state that doesn't have any state income tax like Florida or Texas. Mitt only pays 15% on his taxes, perhaps the host should find a better tax advisor.
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Just a couple of observations ...
First of all, the top tax bracket on earned income, to be precise, is
39.6%. Occasionally people ask why it's not 39%, or simply rounded to 40%. The reason is that during the debate leading to the budget reconciliation act of 1993, policymakers selected a 36% rate, but then added a 10% surtax atop that, arriving at a 39.6% rate. As I recall, it was meant to apply to any income above about $250K.
A couple of populous, high-tax states have state and local income tax rates that push the marginal tax rate on high-income earners north of 50%. California, for instance, imposes a 13.3% state income tax rate on top-bracket income. Although I'm too lazy to look up the exact rates, I do recall reading recently that the combined New York State/New York City income tax rate is close to the same.
Most TV hosts can't simply move to a lower-tax state, as their income is generally earned in NYC, so they're subject to state and local tax as well as federal tax.
And they can't get their effective tax rates down to anything remotely close to Mitt Romney's level, either. It's simply a matter of the classification of income, and has very little to do with whether the taxpayer has good advisors.
According to published reports, Romney paid an effective tax rate of just under 15% during a few years prior to his presidential run. Although he refused to release any tax returns, I think it's fair to assume the following: He took little or no salary income from any entity, since it would obviously be subject to a tax rate of 39.6%. Instead, his income was comprised of some combination of carried interest, capital gains, and qualified dividends, all of which were taxed at a 15% rate prior to 2013.
However, the tax rate on all three of those categories was increased to 23.8% last year, so it's likely that Romney's effective tax rate is currently something close to that number.
Millionaire Leaves Fox Host Speechless
