Easing Impact of a Tax Rise

Earlier in the week, David Johnston, of the New York Times, posted an article with advice for taxpayers earning more than $200,000 per year – who’s tax rates will likely go up in the next fourteen months. This is due to tax cuts sponsored by President Bush that are set to expire at the end of next year.

When the Bush cuts expire, the two top tax rates will move up from 33 percent and 35 percent to 36 percent to 39.6 percent. For a couple making $500,000, the added tax will be about $6,000 per year, for a couple making $1 million about $30,000.

The bite could be less than that for business owners, however. President Obama, on the campaign trail, proposed allowing founders of small businesses to sell their enterprises without owing capital-gains taxes. Congress has yet to act on this idea.

He also campaigned on the promise that there would be no tax increases on the bottom 98 percent of earners. Earlier this year, President Obama signed a two-year tax break that one of his economic advisers, Austan Goolsbee, said “included $63 billion for the Making Work Pay Tax Credit, a direct tax cut for 95 percent of workers and the magnitude of just about the largest middle-class tax cut ever.”

For high-income taxpayers, here are some steps to arrange your affairs to get the most benefit with the least tax when the Bush cuts lapse:

Check out the tip at the New York Times website...

Mayor’s Office: Jackson Memorial Cost L.A. Taxpayers $1.4M

From CNN.com:

The memorial service for singer Michael Jackson cost the city of Los Angeles $1.4 million, the mayor’s office said Wednesday.

Spokeswoman Sarah Hamilton said the costs included putting extra police on the streets, trash pickup, sanitation, traffic control and more for the Tuesday event.

Three thousand police officers — almost one-third of the Los Angeles police force — were on hand to ensure the Jackson events proceeded smoothly, Los Angeles Assistant Police Chief Jim McDonnell said Tuesday.

The city, which is $530 million in debt, set up a Web page asking Jackson fans to donate money to help with the expenses.

On Tuesday morning, hundreds of donors contributed more than $17,000 through the Web site. But then, the high volume of traffic caused it to crash frequently and for long periods of time, the mayor’s office said.

The city, therefore, was unable to collect contributions for several hours on Tuesday. The site also crashed for 12 hours, beginning at 8 p.m. Tuesday — and again, periodically throughout Wednesday morning, the office said.

The Los Angeles City Attorney Carmen Trutanich does not want taxpayers to pay a penny for the service, his spokesman said Wednesday.

“The city attorney does not want something like this happening again, the city paying (the initial costs) for a private event,” said spokesman John Franklin. “That’s especially in a cash-strapped city, where people have been furloughed or even lost jobs.”

Michael Roth, spokesman for AEG — which own Staples Center and put on the event — could not be reached for comment