Beginning this Sunday, the United States will gain bragging rights in the economic war with Japan and China: It will have the largest jobs-killing corporate tax rate in all of the industrialized world.
This is no April Fool’s joke. Once Japan officially drops its tax rate to 36.8% this Sunday, the USA’s will be at the top of the chart at 39.2%.
While the President has suggested a new 28% rate, Republicans claim that the reduction also would bring $350 billion in new taxes to offset losses. In response, the GOP is suggesting a reduction to 25%; however, the upcoming election seems to be preventing any compromise.
Any business groups are asking that the government make a cut in the rate for corporate taxes, believing the reduction would improve the growth of jobs and encourage reinvestment in industry. These groups cite moves in the UK to loser taxes by 6% from the former rate of 28% in a move to increase jobs and investment in Britain.
Tia Freeman of the Roundtable groups claims comprehensive tax reform to be imperative for the United States if the country is to remain an economic leader in the world.
Chair of the Senate Republican Policy committee, John Barrasso, R-Wyo. is also pressing for tax rate action. Barrasso claims that Russia and China with 20% and 25% tax rates respectively have lower rates than the US. This higher tax rate puts American companies at a disadvantage in the world market.
From Tax Cuts to Tax Increases – Maryland Senate Votes to Tax the Rich More
Maryland residents who earn more than $500,000 annually will have to pay more taxes after the Senate voted to increase tax rates for the rich. Many people see this as class warfare launched by liberals.
The proposal dubbed the “millionaire’s tax” was approved after liberal-leaning Senators refused to approve a smaller tax rate for all taxpayers unless the rich took a special hit.
More than 15,000 households will be affected by the new law. Couples filing jointly will have to pay at least 2,752 dollars more on their income.
The idea is similar to the proposals of President Obama that have pitted him against congressional Republicans in a serious standoff.
Senator Robert A. Zirkin, a democrat from Baltimore County, was against the proposal because it literally discriminated a certain group of people based on their earnings.
At one time Senator David Brinkley offended his colleagues after claiming that Karl Marx would be happy with the move. He apologized later on for the statement.
Senator Paul Pinsky, a Prince George’s County liberal democrat defended the proposal claiming that it is not wrong to ask high income earners to pay higher taxes.
After the Senate approval, the measure will be moved to the House of Delegates which has already indicated that it would like the wealthy in the society to pay more, but does not agree with the mechanism proposed by the Senate.
The Senate is planning to cut spending by nearly 500 million dollars. It has also indicated that it will authorize the state to collect local income tax if the counties do not provide adequate funds for their schools.
I have spent the entire Saturday analyzing my tax returns, both Federal and State, first I did a Joint return with the Federal we came out even that is we do not owe the tax man and he owes us very little, not even enough for a very good bottle of wine. However with the sate that was different we owe almost five hundred dollars, so I decided to evaluate the option of Married Filing Separate, at the back of my mind I know that in the Federal Tax return this is the most expensive option, but there could be savings on the State return.
I allocated all the income between my wife and I, that is whatever income is attached to her social security number belongs to her, then I analyzed the Schedule A deductions, this gets a little tricky, like the mortgage interest expense and Real Estate Taxes is attached to my social security number therefore I had to split those between us. Expenses such as medical, dental, eye glasses we have our separate bills for the year and as faith would have it all the medications are mine. I had to pay special attention to the medical expenses because we are residents of Ohio and there is a credit for medical expenses on Ohio Tax Line 47. Please note there are many good Tax Return software on the market which could have done this automatically, if I had use one like TurboTax it would have taken me a lot less time, but it snowed today and I am confined to the basement of our home.
After refiguring both federal and State, the result shows it would be a very bad idea to file Married Separate for the Federal return, however on the State return was completely different, we both ended up with small refunds instead of a liability of almost five hundred. On our combine return filing joint we had an effective Tax Rate of almost 5% while on the Married Filing Separate return my effective tax rate is 4.5% and hers 3.5% although collectively we have a total higher rate on the Separate returns we did not owe any State Tax as in the Joint Return which has a lower rate.
I was very amazed and I checked it several times, then I logged on to the State of Ohio Tax Web page and entered the information for two separate returns and Walla I was right all that work pays off sometimes it is better to File Married Filing Separate for the State return. Although I am not a Tax Expert I found the process was not that difficult our return was a simple clear cut return with just my wife and I, can I claim the dog?, OH the dog belongs to my youngest child Dang remember a pet is not a dependent.