From 1940 to 1963, the top marginal income tax rate in America was between 81% and 91%. Today’s federal rates on even the highest earners are much lower. However, with the help of state and local governments, high-income investors can end up forfeiting 60%, 70% or even more than 80% of their profits from the time they’re generated through the moment they’re spent.
– Jack Hough, Smartmoney
Through a combination of living in a highly taxed state, such as New York, receiving corporate dividend profits, and purchasing specially taxed items such as cigarettes and cellphones, your average tax may be up to 87%.
Usually my clients need my services as a tax attorney because they haven’t paid their taxes at all, but as the Smartmoney article makes clear, you can make the mistake of paying too much tax. The solution is to stay informed, keep clear of tax ripoffs (I published a tax ripoff report just the other day), and find an experienced tax advisor and avoid tax scams and ripoffs.
Until next time,
Jeffrey I. Fouts, Tax Attorney