Rockland County, NY family law attorney Paul Goldhamer, Esq. is a founding partner at Kantrowitz, Goldhamer & Graifman. He has successfully handled thousands of divorces and complex family matters, and some of his appellate cases have changed legislation. Mr. Goldhamer has also taught at New York University, Columbia University, and Fordham, and made numerous national media appearances. He has been honored with a prestigious AV Preeminent Rating by Martindale Hubbell for the last two years, and has a 10/10 Avvo rating.
by Paul Goldhamer, Esq.
A Word about the proposed tax overhaul bills:
To get into the top 1% of wage earners in 2014, your family must have earned $430,000, according to the 2014 US Census Bureau.
That’s not enough to get you any real relief under either of the new tax plans proposed. Further, if you live in California, New York, New Jersey or any state with high income tax, you stand to lose that deduction.
In addition, if you are in a high real estate tax state, there’s every chance that the best of the two bills proposed will limit you to deducting only $10,000 on your income tax return. If your Real Estate tax is $20,000 per year, you can kiss $10,000 of that deduction goodbye. That is $4,000 more in federal tax.
They have proposed reducing the federal tax rate for earners of $191,000 or more by 1%. Big deal… you will pay 38.6% instead of 39.6%. That just will not help. That 1% won’t insulate you from the loss of the payment of state taxes of $10,000, $20,000 or $30,000, or the loss of $10,000 or more of tax deductibility on your real estate tax bill.
There is almost no help for you if you are earning under $100,000.
Another fact is that the “lower uppers” (the people who are upper middle-class but not wealthy), such as the rather hard-working entrepreneurs that earn $200,000 to $500,000 (and there are a lot of them in the Metropolitan NY area), will not save taxes, but rather pay more.
What about those in the top .01% of the earning range? This group — the mega wealthy — stands to save millions upon millions of dollars. There are 15,000 families like this in the US. Their average yearly income is $9.6M. Do you know any of them? I don’t.
The Estate (Death) Tax:
Currently couples can escape Estate Taxes up to approximately $10.9 million of joint assets. That’s the law as it is right now on a federal level. The eradication of the Estate Tax is only going to help about 1300 families next year. There are 1.5 million families like this (Five of them are Trump and members of his cabinet. What a coincidence!)
The people who earn $30,000 – $250,000 are not going to fare well either. What tiny limited benefits are offered to them under the bills now as passed by the House and Senate, exist only for a short period of time. They expire, leaving this group paying greater taxes, within 10 years.
This nonsense about the eradication of the Estate Tax helping the “small business owners”, according to several non-political tax groups, will only help about 132 businesses in America. Your average small family business doesn’t pay taxes, because they take most, if not all, the money out of their pass through Sub Chapter S corporations and pay tax on it yearly as personal income. This is only going to help major corporations and huge businesses.
It’s a shame that in a huge effort to make it look like a good tax bill is about to be passed, the American public is about to be fooled. Yell at your representatives to make sure these Bills do not become law.