What Does “Rich” Really Mean Today?
Defining whether or not someone is rich has been at the forefront of a heated debate for years. Whether or not we should raise taxes for those who are rich is a separate, and even more hotly debated issue.
The issue starts to come into play once we get into the area of families making less than $1 million per year. At about $1 million, it is universally assumed that, that in fact is someone who is rich. So under that bracket, at what point does someone stop being rich?
Roberton Williams, a fellow at the Tax Policy Center stated that “It’s just crazy the way these things work, but that’s just the way it is.”
The White House has made a proposal that states they will turn the existing seven tax rates into three — 10, 25, and 35 percent. Although there are new tax brackets, the White House has not clarified the amount of income that will go behind each of those percentages.
Under the current stipulations, a married couple earning $470,701 per year pays the highest amount of taxes which ends up being 39.5%.
Those numbers are fresh and new as they have only been drawn under the Obama administration around 4 years ago.
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The idea to make the tax brackets was done to avoid a “fiscal cliff” which after the expiration of a federal stimulus package, many economists stated, would have catapulted the country back into recession.
Obama decided at that point so set the bar for being rich at a much lower bracket than ever before. $250,000 per year was the new limit on being rich would would raise taxes for everyone above that point.
To help fund Obama’s Affordable Care Act, the President proposed two new taxes which were mainly aimed at the rich. One of those was the Medicare surcharge, and the other was a net investment income tax. Neither of these taxes went into play unless you earned over $250,000 per year. Only time will tell where the new leadership brings taxes.