President Obama’s plan to raise taxes on Americans making more than $250,000 is riling many business groups, even though only a small percentage of business owners actually bring home that much. But those households that do earn more than $250,000 could see their tax bills jump significantly, some estimates suggest.
An article in yesterday’s Washington Post offered some interesting illustrations of just how much more in taxes some entrepreneurs would owe under various tax-hike proposals being thrown around. Estimates suggest only 2% to 5% of small-business owners will see their taxes go up under the Obama plan. Yet, those who do may see increases of 50% or more depending on what tax-hike proposals are eventually implemented.
Gail Johnson, owner of a Virginia-based education company, and her husband jointly earn about $515,000 annually and typically expect a yearly federal tax bill of about $120,000, according to the article. But starting in 2011, the higher marginal tax rates President Obama is calling for would add about $13,000 to that bill. Proposals to cap itemized deductions at 28% of income would tack on another $10,000 to the tax bill, while charging Social Security tax on income over $250,000 could add another $30,000 (since Ms. Johnson is both the employer and the employee). So in all – assuming all these tax raises actually take effect – Ms. Johnson and her husband could see their tax bill jump by close to 50%.
Another Ohio business owner told the Washington Post that Obama’s plan could add another $60,000 to his $120,000 tax bill.
Business groups fighting the tax-hike proposals argue such huge increases will greatly hurt these business owners’ ability to expand their businesses and hire new employees. It could be especially painful for the businesses with the most potential to grow big.
Readers, would you see your taxes go up under President Obama’s plans? Do you think it’s a good idea to raise them?
No comments:
Post a Comment