William D King – Tax Rate on Personal Income Will Be Highest In OECD Under BBB Framework
By Space Coast Daily // November 26, 2021
Under the current iteration of the BBBA or the House Build Back Better Act, the average form of top tax rate on the personal income might reach up to a hike of 57.4%. It will result in the highest rate in the USA Organization for Economic Co-operation and Development or OECD.
All the 50 states along with the District of Columbia might have the top tax rates noted on their said personal income, which will be exceeding that 50% mark.
Learning about the changes and the current norms is important and getting it proficiently covered will work out in your favor. So, be sure to focus on all the plausible options and get detailed information from experts like William D King over here. The more you come to learn about the rules the better you can work on your formwork, to take maximum advantage out of it.
High income taxpayers by William D King:
The taxpayers with higher income might face one surcharge on the MAGI or the Modified Adjusted Gross Income. It will be stated to be the adjusted gross income based less investment interest expense.
■ The surcharge over here might be equal to the 5% of the MAGI in excess of that of the $10 million with the additional 3% on MAGI above the benchmark of $25 million. It will have a total surcharge of 8%.
■ Here, the plan might redefine the current tax base to which around 3.8% NIIT or net investment income tax applies directly to be added in the “Active” part of pass-through income.
■ Here, all the taxable income above the $400,000 mark or the $500,000 for the joint filer might be subject to a growing tax of around 3.8% because of the combination of the Medicare and net investment income tax taxes.
■ Under the present law as stated over here, the top version of the marginal tax rate on the stated ordinary income is scheduled to increase from the previous 37% to that of the 39.6%, and it will start from 2026.
As an overall count, it can be clearly stated that the top marginal based tax rate on the personal income right at the federal level might rise to around 51.4%.
Some of the added points:
Apart from the top federal rate, the individuals might even face some taxes on the personal income in majority of the USA states. Depending on the average version of the top marginal local-state tax rate of around 6.0%, the combined top tax rate on the personal based category will be 57.4%.
It is pretty higher than the present one levied in any of the developed country.
It assumes that the deduction for the local and state taxes will remain capped even now, after the changes have been made over here. If you can assume that the cap for local and state tax deduction has been lifted, the average version of the top local and state tax rate might fall to around 54%.