House Way along with Means Chairman Kevin Brady (L) (R-TX) along with Speaker of the House Paul Ryan (R) (R-WI), joined by members of the House Republican leadership, introduce tax reform legislation November 2, 2017 in Washington, DC.
The GOP’s tax plan contains a little-noticed tax hike on big earners of which could add another $12,000 to their annual tax bill.
First highlighted in Politico, the provision inside the completely new plan could claw back one of the benefits of which wealthy taxpayers enjoy inside the tax code. The plan calls for taxpayers to pay the lowest tax rate — 12 percent — on the first $45,000 of their income. yet the plan could take of which benefit away via those creating $1 million or more.
So for someone creating more than $1 million, instead of paying 12 percent on their first $45,000, they could pay the top rate of 39.6 percent. So they could end up paying yet another $12,420.
“This specific was a surprise until yesterday’s Discharge,” said Joseph Perry, the tax along with business services leader at Marcum, who advises many wealthy families. He added of which the provision mirrors a similar feature inside the corporate tax code, where firms of which make more than $10 million or more pay a rate of 35 percent on their income.
While some inside the media are calling the provision a “completely new hidden top tax-rate” of over 45 percent, of which’s genuinely more like a built-in clawback on the break they could normally get on their first $45,000 of income. of which’s not as if the top rate could change via 39.6 percent.
Still, the proposed giveback could have raised about $5 billion in 2015 along with will raise about $50 billion over the next decade, according to the plan.
along with the provision is actually just the latest in a string of hidden tax hikes on big earners inside the GOP bill.
The plan contains a “divorcee tax,” which eliminates the deduction of which divorcees who pay alimony receive. of which also could limit the provision for “like-kind exchanges,” which the wealthy often use for expensive art along with collectibles.
of which’s not to mention the biggest tax hike for the wealthy — the elimination of state along with local tax deductions. All the more reason why the GOP tax plan could face stiff opposition, especially via the wealthy.
WATCH: What the tax bill means for the wealthy