somebody help me.. I know I am mathmatically challenged.. but if you earn 250 grand and are taxed at 39% and all you deductions for charity and home mortgages have been removed won't you pay approximately 97,000 in income taxes.. leaving you with 153 to live on.. or am I way the hell off base,, then let the state tax you again,, bla bla bla bla you suddenly ain't rich no mo are ya??? then don't forget doncha have to take out sociable security taxes too???
Our tax rates are on income brackets....if our gvt is saying that taxes will go up for those couples making above $250k, then one has to assume that the taxes paid on the money earned over $250k is where the tax bracket begins to tax at a higher rate...below this income, it would be taxed at the lower rates existing now.
A couple making $300k of taxable income combined, would keep what tax rates they are paying now for the various income tax brackets below the $250k....and anything earned above the 250k in taxable income would be taxed at a 35% rate, verses a 28% rate for that right now....
so, the 50k in taxable income, this couple earns over the $250k will be taxed at 35% instead of 28% is my understanding and this difference amounts to paying only $3500 more in taxes for the $50k in extra earnings/ income, than they would if the tax breaks were not allowed to expire.
we are not talking about the taxes people pay on all of their income, nor property taxes on their homes, nor sales taxes on the goods they buy....
THIS is an income tax increase, all those other taxes stay the same as they are now....and do not increase in their rates unless a state decides to do such etc....
we are talking about a 7% tax rate increase, and only for any taxable money made above this amount of 250k percouple.
TAXABLE INCOME is your net income after you have taken all of your tax deductions and standard deductions...
and if you are a small business it is the money you have left after you paid all of your fixed expenses and cost of goods and payroll expenses, FICA taxes on payroll... etc etc etc, along with any money you may use reinvesting in your business....AFTER all of that is paid, the net money you have left, is Taxable income.
For example, a couple making $300k in taxable income, probably grossed around $350k, but took deductions to get them down to the $300 in taxable income....
A small business having $300k in taxable income, is probably a business that generates $1.5 million in sales, but with all of the business deductions that can be taken, it nets them only the $300k income that is taxable.
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