How Much You Have to Make Before Your Taxes Go Up, Ctd.
My friend Ethan Pollack, an analyst at the Economic Policy Institute, writes to note that our hypothetical $250,000-a-year earner from this post might actually
Jul 31, 202015.3K Shares480.7K Views
My friend Ethan Pollack, an analyst at the Economic Policy Institute, writes to note that our hypothetical $250,000-a-year earner from this postmight actually see his household’s taxes go down, if Obama’s changes go through:
“„Obama said he wouldn’t raise taxes on people making under $200,000 (or $250,000 for couples, but lets forget about them for simplicity’s sake). That’s [adjusted gross income] — translated to taxable income, that’s $195,550. Problem is, the 33 percent bracket, which is scheduled to rise to 36 percent under current law, includes income down to $171,850. So for the income between $171,850 and $195,550, Obama actually bumped that marginal rate down into the lower 28 percent bracket. So, it’s correct that the taxes on that last dollar will increase by 3.6 cents, but on the $23,700 before it, taxes will drop by about $1,185.
“„In other words, your total tax burden will *fall *by $1,184.96. In order to fully break even, you’ll need to make $39,500 above the cut-off, and only taxpayers above *that *will see their tax burden increase.
There you have it. If you’re an individual, you’ll need to make $239,500 a year before you’ll see your taxes go up by pennies.
Paula M. Graham
Reviewer
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