Obama proposals raise taxes on high incomes
Some taxpayers say they will try to hold on to more of their money by making less.
President Barack Obama’s budget proposals have drawn the line: $250,000. Many tax hikes and phased out credits will apply to households with annual incomes that cross that line.
A pretty small group of people fall into this category: incomes so close to $250,000 that they could manipulate them to be just lower than the quarter-of-a-million mark.
Always seeking opportunities
Not all people who make this approximate income are opposed to paying the higher taxes. Many people are perfectly happy just having enough money to be comfortable and live without needing payday loans.
However, I can’t say that I was surprised today when I came across an article from ABC News that reports on ways people are trying to skirt taxes.
It’s true, people who make just more than $250,000 could stand to lose more money than they would if they pull in $249,000 instead.
Scaling back business
People with incomes in this range generally are not paid hourly and have plenty of vacation days. So avoiding the extra taxes is more complicated than just skipping work for a few days.
An attorney in Louisiana says she will scale back her business if the Obama tax increases pass. She says she will take on fewer clients to ensure her income falls below the $250,000 mark.
More retirement money
Other workers who have incomes near this range are planning to have more money taken out of their paychecks and put into 401ks.
There are other ways to manipulate the bottom line, such as attempting to recognize losses and pushing gains to years when your income is lower.
Why the fuss?
Dr. Sharon Poczatek, who runs her own dental practice in Boulder, Colo., explains the mentality behind trying to avoid the taxes.
“The motivation for a lot of people like me – dentists, entrepreneurs, lawyers – is that the more you work the more money you make,” said Poczatek. “But if I’m going to be working just to give it back to the government — it’s de-motivating and demoralizing.”
I really don’t think that limiting the amount of charitable contributions on anyone is a good idea. Charitable contributions are some of the largest sources of funding for university endowments, research grants, and scholarships. Making it so that only the government can dictate who gets funds for any project is a ridiculous notion, and quite frankly a dangerous one. I also hardly think that we should be decreasing the incentive for doctors, lawyers, engineers, etc, to be good at their jobs, because those are people that we need.