TITLE

Tax Brakes

AUTHOR(S)
Hines, Michael L.
PUB. DATE
July 1993
SOURCE
Journal of Financial Planning;Jul93, Vol. 6 Issue 3, p108
SOURCE TYPE
Academic Journal
DOC. TYPE
Article
ABSTRACT
This article focuses on the lowering of the tax brackets from 50 to 28 percent in the U.S. This has been explained with the help of an example, two income couple, who have two-dependent children. Husband is an executive who made $175,000 in 1985, wife is a legal advisor who made $25,000. Like many high-bracketed couples of the 1980s, this couple also sought to lower their taxes by every reasonable means possible. They saw the interest on their home and major purchases, such as automobiles, as a form of tax relief. They both made maximum deductible contributions to their individual retirement accounts. They also invested in real estate and so called tax-shelter limited partnerships to further reduce their lofty tax bracket of 50 percent. If they could create capital gains from investments in stock or real estate, they could get special treatment in the form of capital-gains exclusion. This effectively created a special tax bracket for capital gains only 20 percent. The reality for many high-income earners is that taxes today are certainly not any less that they were in 1985 and in most instances, they are actually higher.
ACCESSION #
5554169

 

Related Articles

  • Tax tips. Moroney, Richard; Carlson, Charles B.; Pogach, Kenneth S.; Sweet, Robert A.; Wright, David A.; Hopfinger, Jennifer R. // Dow Theory Forecasts;12/5/2005, Vol. 61 Issue 49, p1 

    The article discusses strategies for managing year-end tax. One tax strategy relates to tax harvesting, or selling stocks in which one have losses to offset realized investment gains. If one plans to tax harvest, he should keep in mind the wash-sale rule. This rule states that losses on a sale...

  • New tax bill brings worries for entrepreneurs, investors.  // SCTWeek;7/2/2007, Vol. 12 Issue 26, p1 

    The article reports on the opposition of businessmen to a proposed U.S. tax bill that seeks to double taxes on most of the income earned by investment partnerships. Members of the International Council of Shopping Centers are concerned that the bill would discourage entrepreneurship by altering...

  • Tax Traps Can Snare Your Capital Gains. Wiener, Leonard // U.S. News & World Report;7/24/2006, Vol. 141 Issue 3, p54 

    This article analyzes the U.S. capital gains tax after changes to the law made in 2006. Confusion still exists regarding how the tax is applied, but some of the regulations are described in detail in the article. The author advises readers to beware property price depreciation, as well as advise...

  • Taxation Advantages of Pension Schemes. Morley, Michael F. // Accountancy;Nov71, Vol. 82 Issue 939, p637 

    This article presents a guide to the tax advantages of pension schemes in Great Britain. A major reason for the popularity of saving via a pension scheme is surely the taxation benefits which are available. The magnitude of the cumulative effect of the various taxation concessions to approved...

  • Capital Pain. Kinsley, Michael // New Republic;10/29/90, Vol. 203 Issue 18, p4 

    Comments on the budget debate in the U.S. in 1990; Justification by Republicans to their opposition to cuts in Medicare benefits; Proposal by Democrats to exchange higher top-bracket tax rates for a cut in the capital gains tax; Idea to raise marginal rates and then give back the money in the...

  • Capital Pain. Kinsley, Michael // New Republic;10/29/90, Vol. 203 Issue 18, p4 

    Comments on the budget debate in the U.S. in 1990; Justification by Republicans to their opposition to cuts in Medicare benefits; Proposal by Democrats to exchange higher top-bracket tax rates for a cut in the capital gains tax; Idea to raise marginal rates and then give back the money in the...

  • WAR OPTIONS.  // New Republic;10/15/90, Vol. 203 Issue 16, p7 

    Comments on the growing likelihood that the United States will wage war against Saddam Hussein's Iraq in Kuwait. Moves by U.S. president George Bush to prepare Congress for war; Intransigence of Hussein about leaving Kuwait; Adverse effect of the United Nations embargo on Kuwait's populace;...

  • Plan Now for the 2006 Tax Season. Feely, Pam // Advisor Today;Feb2005, Vol. 100 Issue 2, p16 

    The article focuses on tax planning as of February 2005. Last fall, Americans have seen two law changes, the Working Families Tax Relief Act of 2004 (WETRA) and the American Jobs Creation Act of 2004. WETRA extended many provisions of the Economic Growth and Tax Relief Act of 2001. WETRA did no...

  • THE TAXATION OF CARRIED INTERESTS IN PRIVATE EQUITY. Weisbach, David A. // Virginia Law Review;May2008, Vol. 94 Issue 3, p715 

    This essay analyzes the tax treatment of carried interests in private equity. It argues that there are two competing analogies: service income and investment income. Standard approaches are not able to re-solve which of the competing analogies is better and often fail even to recognize that...

Share

Read the Article

Courtesy of VIRGINIA BEACH PUBLIC LIBRARY AND SYSTEM

Sign out of this library

Other Topics