Personal income tax was finally introduced in 2013 for top-income earners, but with extremely high deduction allowances.
The new tax law promises higher deductions late in this decade.
This includes zero capital gains for those who buy and hold small business stocks for five years, higher deductions for buying new machines and equipment, and an increase in the maximum deduction for startups.
Big mistake on the dismount of his first vault, stepping out wide to the left into the higher-deduction area.
The trend -- evident as companies begin informing workers of their benefit choices for the coming year -- takes the form of fast-rising co-payments and deductibles, higher payroll deductions to cover spouses and children and new kinds of health plans that give workers a fixed sum to spend.
Separately, the Obama administration also wants to limit high earners' deductions by letting certain Bush-era exemptions expire.
Limiting high earners' deductions for mortgage interest, local-government taxes and other things is certainly more efficient than raising their marginal tax rates even more.
Other retirees who may benefit are those whose income is so high their deductions take a haircut and those who bump into the limit on the percent of income that can be deducted as a charitable donation (50% for cash gifts, 30% for stock).
But the long-running program has been hobbled by allegations of worker exploitation, with students paying hefty travel fees for the opportunity and then going into debt due to low wages and high housing deductions.
Keep in mind that taxes in NYC are especially high, as deductions include FICA, Federal, State, District, and City taxes, not to mention any other company deductibles, such as health care or 401(K).
