President Obama wants to raise marginal income tax rates on incomes over $200,000 for single taxpayers and $250,000 for couples filing jointly. Here’s what the President doesn’t want you to know: it’s easy to avoid paying this onerous 4.6 percent tax increase. I’ll let you in on the secret, but fair warning, there’s some arithmetic involved. Start by figuring your total taxable income, then subtract $249,999.99. Write a check for the rest, payable to me. I’ll form a tax-deductible educational foundation called “The Marginal Tax Rate Education Fund,” and send you a receipt that will reduce your taxable income below the $250,000 threshold. Result: No Obama tax hike for you!
While these wealthy investors grapple with the slight uptick in their tax rates, low-income Americans, seniors, and people with disabilities at the other end of the spectrum are bracing for devastating spending cuts to necessary entitlement programs Republicans hope to push as part of a deal to avert the so-called “fiscal cliff” early next year.
UPDATE: Faux News’ Gretchen Carlson also does not understand how marginal income tax rates work.