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Work Hard in NY and CA? Prepare to PAY Under Democrats’ New Tax Plan

September 13, 2021 By E.J. Smith

Two men in business suits struggling to roll a giant stone ball labeled "tax" up a steep hill.

By Elnur @ Shutterstock.com

Are you one of your state’s most productive citizens? Do you already pay hundreds of thousands, or even millions in taxes to state and federal governments each year? Your hard work is appreciated by House Democrats, who are happy to relieve you of even more of your money.

If You’re Serious, Sign Up for My Email. But Only If You’re Serious.

Democrats have released a tax plan aimed at paying for their planned $3.5 trillion spending bonanza, and it takes direct aim at high-income Americans. Here’s a brief of the plan from Robert Frank of CNBC:

  • The proposals include a 3% surtax on taxpayers earning more than $5 million a year. They would also raise the top marginal income tax rate to 39.6%.
  • The plans would preserve the 3.8% net investment income tax and extend it to certain pass-through companies.
  • The result is a top marginal federal income tax rate of 46.4%.
  • The House plan is still a proposal and could change. Yet the combined rates for New York City would be among the highest in nearly 40 years.

In California, top earners will pay 59% of their top dollars to state and federal governments (unless Larry Elder wins the recall and is allowed to implement his plans to turn the state around). But in New York, top earners will pay 61.2% of their marginal income in taxes.

Frank explains:

Top earners in New York City could face a combined city, state and federal income tax rate of 61.2%, according to plans being proposed by Democrats in the House of Representatives.

The plans being proposed include a 3% surtax on taxpayers earning more than $5 million a year. The plans also call for raising the top marginal income tax rate to 39.6% from the current 37%. The plans preserve the 3.8% net investment income tax, and extend it to certain pass-through companies.

The result is a top marginal federal income tax rate of 46.4%. The marginal rate is the rate for every dollar above the tax bracket income threshold.

In New York City, the combined top marginal state and city tax rate is 14.8%. So New York City taxpayers who earn more than $5 million a year would face a combined city, state and federal marginal rate of 61.2% under the House plan.

The House plan is still a proposal and could change. Yet the combined rates for New York City would be among the highest in nearly 40 years.

Top earning Californians would face a combined marginal rate of 59.7%, while those in New Jersey would face a combined rate of 57.2%. Hawaii could face combined rates of 57.4%.

Action Line: You need to spend your retirement life in a state that respects your money, and you. Start finding a better America by looking at my Super States.

Originally posted on Your Survival Guy. 

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E.J. Smith
E.J. Smith is Founder of YourSurvivalGuy.com, Managing Director at Richard C. Young & Co., Ltd., a Managing Editor of Richardcyoung.com, and Editor-in-Chief of Youngresearch.com. His focus at all times is on preparing clients and readers for “Times Like These.” E.J. graduated from Babson College in Wellesley, Massachusetts, with a B.S. in finance and investments. In 1995, E.J. began his investment career at Fidelity Investments in Boston before joining Richard C. Young & Co., Ltd. in 1998. E.J. has trained at Sig Sauer Academy in Epping, NH. His first drum set was a 5-piece Slingerland with Zildjians. He grew-up worshiping Neil Peart (RIP) of the band Rush, and loves the song Tom Sawyer—the name of his family’s boat, a Grady-White Canyon 306. He grew up in Mattapoisett, MA, an idyllic small town on the water near Cape Cod. He spends time in Newport, RI and Bartlett, NH—both as far away from Wall Street as one could mentally get. The Newport office is on a quiet, tree lined street not far from the harbor and the log cabin in Bartlett, NH, the “Live Free or Die” state, sits on the edge of the White Mountain National Forest. He enjoys spending time in Key West and Paris.

Please get in touch with E.J. at ejsmith@youngresearch.com

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