Rich prepare for Obama's tax plan
Barack Obama's promise to raise taxes on top income earners has businesses and wealthy individuals rushing to take advantage of tax breaks before new rules take effect. Jeff Tyler has more.
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Kai Ryssdal: Barack Obama has said he wants to raise taxes on the wealthiest Americans. That means the federal income tax rate for people in the top bracket could jump from 35 percent to just shy of 40 (percent). Figure two-and-a-half months to inauguration day, Stephen was just saying, maybe, I don't know, a month or two more for a tax package to get through Congress, and time's running out for businesses and wealthy individuals to make appointments with their accountants.
Marketplace's Jeff Tyler reports, now, on those who want to take advantage of the old system before the new administration takes over.
Jeff Tyler: Multi-millionaire athletes are among those who could face higher taxes under an Obama administration. So some sports agents are trying to protect the next round of super-stars. They're asking for their client's signing bonuses to be paid during this calendar year. That way, they'd have to pay less to Uncle Sam next year.
Other high earners are concerned that Obama might raise the capital gains tax. Tax lawyer Richard Walton with Buchalter Nemer says, even in a down market, this could be the right time to sell certain capital assets.
Richard Walton: Such as buildings, such as stocks, such as real estate, that have appreciated significantly and go ahead and realize the capital gains on those investments while the rate continues to be low.
Walton also recommends thinking about estate planning to minimize the death tax.
Walton: In a depressed market, where investments are not worth as much as perhaps as they will be a year or two years from now. Now is the time to begin moving that money in a way that generates a benefit down the road for estate planning.
Anticipating higher tax rates ahead, Los Angeles-based CPA Steve Willing suggests investors take a second look at their portfolios.
Steve Willing: Consider shifting slightly more into the municipal bond category, so they have tax-free income, because if the tax rates go up, tax-free income will become more valuable.
But don't over-react. Just because you might save a few bucks by taking the tax hit this year, experts say you could be better off paying slightly more next year, and having that cash available.
I'm Jeff Tyler for Marketplace.
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From Philadelphia, PA, 11/05/2008
Being a 1st generation business owner. I quit a job to start my own business with 500.00 in the bank. I detested this democratic way of steal from the guy who busted honest ass to get what he has and give to the lazy food stamp idiots. Who refuse to do the job the illegals do because they feel it's beneath them..hell I was janitor for 5 years before I took an office position but my 4 yr plan is cut staff and bring my best employees up to the min tax on the Obama plan ...for me I will defer my income for 4 years...at which time, The people will be begging for a new president....See you in 2012....oh an all my savings accts and stocks will be in 4 year CD's....
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