They are invisible taxes that consumers don’t know they’re paying on cigarettes, alcohol, gambling, and pot. Thanks to accountingschoolguide.com, check out this infographic to see what things would look like in the absence of these sin taxes. Continue Reading…
Archives For New York City
A controversial twin tax on sugary soft drinks and junk food under discussion in Mexico’s legislative branch is likely to reduce volume sales for some of Mexico’s top public companies. These include Femsa and Bimbo, two of Mexico’s 19 largest public companies, according to Forbes 2013 list Global 2000 Largest Companies. Continue Reading…
Baseball fan? Or a hot dog aficionado like President Obama? As designated by the National Hot Dog and Sausage Council, Happy National Hot Dog Day! More importantly, did you know that a lot of states have a ‘hot dog tax’?Continue Reading...
Last month President Obama proposed nearly doubling the federal tax on cigarettes from its current rate of $1.01 per pack to $1.95. CNN Money reports the increased revenue, estimated at $78 billion/10 years, would be used to fund childhood education and reduce smoking rates. If implemented, the administration will have raised the cigarette tax by more than 5 times its pre-Obama level of $0.39 per pack.Continue Reading...
The Highest State and Local Income Taxes on Million Dollar Earners
If you thought the partisan hackery over raising taxes on the wealthy was limited to Washington, think again. National feuds have a way of trickling down to the state and local government (SLG) level, and tax policy is no exception. In California voters passed proposition 30 – a tax hike measure which adds three new upper income brackets; but in New Hampshire, a constitutional amendment that, “explicitly forbids the Legislature from imposing any new income tax on personal income,” was also approved.
In 2012, SLGs across the country had historically high and low income tax rates on million dollar earners. Forbes.com asked Wolter Kluwer’s CCH division to calculate taxes for married couple with a $1,000,000 salary and $110,000 of itemized deductions in the largest city in each state. We reproduced and analyzed their data in the charts and tables below. Here are the top 10 steepest bills:
- New York (New York City)
- It’s no shock that the big apple, known for its high cost of living, has the highest tax rates in the nation. Until recently, the state had a “millionaires tax,” which was actually a surcharge on individuals making over $200,000/year. That was eliminated at the end of last year when Gov. Cuomo and legislative leaders came to an agreement on a massive state tax reform plan, which lowered rates for high income earners to less then what they were with the surcharge. Of the cities/states analyzed, New York had the highest drop from 2011-12; still, the state remains the most expensive for millionaires. Critics cite that the richest 1% of New Yorkers pay nearly 40% of the income tax, but that isn’t astounding given that nationwide the top 1% pay 37% of all income tax.
- Hawaii (Honolulu)
- If you make over $400,000 in Hawaii, you’re stuck with the highest state income tax rate in the country. There was no change in 2012 and potential homebuyers shouldn’t expect one anything soon. Paradise isn’t a cheap date, but Hawaii is one of the richest states and its tax rates aren’t scaring millionaires away. In fact, they have more millionaires as a percentage of their population then any other state!
- California (Los Angeles)
- California has been making headlines with their new tax legislation. Proposition 30 passed on Nov. 6th, by a vote of 54.5% – 45.5%, creating three new upper income brackets retroactive to Jan 1st. The combined state and local income tax rate for Los Angeles is the highest in the country, but there are enough loopholes in the code to make California the third most expensive place for millionaires.
- Oregon (Portland)
- There are no local income taxes in Portland, but the top state rate of 9.9% is enough to put the state in fourth place. Unlike the above states though, the top rate starts at incomes of only $125,000. But hey, at least Oregonians can rejoice in being one of only five states that have no sales tax.
- Maryland (Baltimore)
- As a Maryland/DC based law firm with a specialty in tax law, it’s only fitting Baltimore and DC are the next two on this list. The state tax top bracket – 5.75% isn’t exactly intimidating, but when you add “Charm City’s” 3.2% flat rate, you’re left with a healthy 8.95% rate for earners making $300,001 or more.
- District of Columbia
- DC Residents are known for their “taxation without representation” license plates, referring to their lack of voting representation in congress and subjection to federal income tax. To add insult to injury, the District itself, which always seems to be stripped for cash, has a top rate of 8.95% for individuals or couples making over $350,000.
- Minnesota (Minneapolis)
- Million dollar earners in the City of Lakes will owe $78,874 in taxes to Minnesota in 2012, giving them the 7th steepest tax burden of the largest cities in each state. If you were wondering about Minneapolis’ twin city – St. Paul, there is little to no difference in tax policy (they’re not called twin cities for nothing) except that the sales tax rate is 0.15% cheaper.
- Maine (Portland)
- Maine doesn’t allow local governments to collect taxes, however, the top rate of 8.5% starts for couples making $40,700. Millionaires shouldn’t feel too exploited here (not that there are many). The lumber state usually falls in the bottom 10 in millionaire residents.
- Vermont (Burlington)
- Vermont cities collect very few local taxes, but unlike their neighbor Maine, the top rate of 8.95% starts for couples with $379,151 (Maine = $40,700) or more income. This may deter some rich ski lovers from retiring in their winter mountain condo.
- Delaware (Wilmington)
- Wilmington has an earned income tax rate of 1.25%, bringing the combined state and local income taxes to 8% and making Wilmington the 10th worst city for millionaires and taxes. Like Oregon, Delaware has no sales tax.
For all the juicy details, check out this data table we made from the information above:
JDKatz, P.C. is a full-service law firm focused on tax law and estate planning. We are dedicated to minimizing your existing liability and risks while providing valuable tax planning to streamline your tax issues in the future. Please call us at 301-913-2948 to schedule an appointment to meet with one of our trusted attorneys.