Are you wealthy and worried about paying more federal taxes next year (and beyond) if Congress lets the Bush tax cuts expire as scheduled?
Although there are indications the current tax rates for all of us will be continued, at least for a while, I understand your concern. It's always a bit scary when you're depending on Congress, or at least one that acts in a timely manner.
But take heart, rich taxpayers. Depending on where you live, you also might be getting some good news about your state tax obligations.
Forbes notes that Republicans' sweeping gains in state capitols and promises of some governors-elect give wealthier taxpayers hope that their state tax rates might soon fall.
2011 tax break for wealthy Rhode Islanders: Rich Rhode Islanders, however, don't have to wait until next year for their legislature to act on taxes. It cut tax rates this summer.
The Ocean State's Democrat-controlled General Assembly unanimously approved the tax reform legislation (H 8196A) in June, and the state's Republican governor signed it into law days later.
Thanks to the law, on Jan. 1, 2011, Rhode Island's top tax rate will go from 9.9 percent to 5.99 percent. In addition, the number of tax brackets goes from five to three and the standard deduction amounts for most taxpayers are increased.
Lawmakers originally believed that middle-income taxpayers would be the big winners under the new law. But subsequent calculations revealed that Rhode Island's highest-income earners also will receive benefits from the tax reform package.
Most-taxed residents: Elsewhere, though, rich residents are bemoaning their states' high tax rates.
Exactly where? Forbes has compiled a top 10 list of the highest state income tax rates for 2011.
But it's not just states that get this dubious honor. The nation's capital sneaked in there.
And it's not just the uber-wealthy who are affected.
Some of the higher state tax rates kick in for taxpayers who earn incomes that none of us would consider rich.
- Hawaii: top rate of 11 percent on taxable income greater than $200,000 per single filer, $400,000 per married couple
- Oregon: top rate of 11 percent on taxable income greater than $250,000 per single filer, $500,000 per married couple
- California: top rate of 10.3 percent on taxable income greater than $1 million for all filers
- Iowa: top rate of 8.98 percent on taxable income greater than $64,755 for all filers
- New Jersey: top rate of 8.97 percent on taxable income greater than $500,000 for all filers
- New York: top rate of 8.97 percent on taxable income greater than $500,000 for all filers
- Vermont: top rate of 8.95 percent on taxable income greater than $379,150 for all filers
- Maine: top rate of 8.5 percent on taxable income greater than $19,750 per single filer, $39,550 per married couple
- Washington, D.C.: top rate of 8.5 percent on taxable income greater than $40,000 for all filers
- Minnesota: top rate of 7.85 percent on taxable income greater than $74,780 per single filer, $132,220 per married couple
Although Hawaii and Oregon each have a top tax rate of 11 percent, the Aloha State is first on Forbes' list, says the magazine, because Hawaii's top rate kicks in at a lower income level than Oregon's top rate.
And yes, New Jersey and New York are tied in the list's rankings. You guys will just have to find some other way to differentiate yourselves. That shouldn't be too hard!
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