Tax Defense Network: Tax Laws Controversies
Tax Defense Network has taken note of the tax code changes over the years. Over the last ten years, he tax code has grown at an astounding rate with 4,428 changes. The recent ‘Buffet Rule’ proposed by President Obama calls for a minimum tax on millionaires. It was not passed.
Tax Defense Network: The Buffett Rule
Tax Defense Network shares that the “Buffet Rule” dictates a minimum tax of 30 percent on those who are earning more than a million dollars a year. According to sources, the new tax rate would affect just 0.3 percent of American taxpayers. According to the IRS, even if taxes were raised to 100 percent for those who make more than a million a year, it would only raise $726 billion.
Tax Defense Network shares an interesting piece of information about how the name “Buffett Rule” came about. The proposed law is named after Warren Buffett who publicly said that he believed the rich, like himself, are paying less federal taxes than the middle class. He proposed that it would be fair to implement a higher minimum tax rate for taxpayers in the highest income bracket.
Tax Defense Network: Mortgage Deduction
Tax Defense Network informs taxpayers about a tax break that has courted controversy because it benefits the wealthy more than the majority of middle class Americans. A mortgage deduction allows home owners to decrease their taxable income by the amount of interest paid on the loan. Homeowners who earn more than $250,000 a year save around $5,500 in taxes by claiming mortgage deduction, whereas a homeowner who earns $40,000 – $75,000 a year saves 10 times less.
Tax Defense Network: Investment Income versus Wage Income
Tax Defense Network outlines that investment income is seen as being more favorable to the economy than income from wages and that is why the tax code leans towards income from investment.
The controversy started when presidential candidate, Mitt Romney, revealed, through tax returns, that he paid a 13.9 percent tax rate in 2010, which is far lower than what most middle-class Americans pay. The reason behind this lower number is because Mitt Romney earns most of his income from investments, and is taxed at the capital gains tax rate than the income tax rate.
Tax Defense Network found that Mitt Romney paid taxes at the rate of 15 percent on an annual income of $21 million, which is comparable to what most middle-income American taxpayers pay while his income is 420 times higher than what the average middle-income family earns.
Tax Defense Network shares the thoughts of economists who say that it is unfair to tax income more than once. Capital gains are taxed many times. A taxpayer’s income from wages is taxed, they pay sales tax for buying goods, and the stock a taxpayer owns is taxed if it makes a profit through a corporate tax. Many American taxpayers are taxed many times. Tax Defense Network observed a rise in the dissatisfaction of the average American taxpayer regarding tax laws, and so felt compelled to review the facts of the controversies.