(HT TaxProf Blog)
When Tiger Woods collected his $1,350,000 check for winning the U.S. Open golf championship this month, his federal and California taxes approximated $586,000. So, Tiger got to keep about $764,000, or 57 percent of his winnings. ...
It was fortunate for Tiger that his most-recent U.S. Open win occurred in 2008. Under twin tax proposals from Obama to 1) remove the "cap" from Social Security taxes for individuals earning over $250,000, a plateau Tiger has long since surpassed in 2008, and 2) eliminate the "Bush" tax cuts, thereby raising the top marginal federal income tax rate to 39.6%, Tiger's taxes on his winner's check would have increased to approximately $776,000, a boost of almost $190,000. Instead of Tiger keeping 57% of his earnings and the government taking 43%, under the twin Obama tax proposals, Tiger's federal and California taxes would have amounted to 57% of his winnings, leaving Tiger with just 43%. ...
The twin Obama tax proposals would result in an increase in federal income taxes for self-employed people earning over $250,000 of about 39% and would take the top federal tax rate on self-employment income to its highest level since 1971. It would also take the top marginal tax rate (federal and state taxes combined) in some states to over 57% on self-employment income. For employees, the top federal tax rates would increase by about 30%.
Only once since 1917 has there been a tax-rate increase equal to or greater than the two twin tax proposals being made by Obama. That tax increase, the Revenue Act of 1932, was proposed by Herbert Hoover. The result was an even greater budget deficit, plummeting tax revenue and a lengthier Great Depression.
Monday, June 30, 2008
Obama Wants A Tiger-Sized Tax Bite!
Here's the effect Obama's tax plan would have on Tiger Woods: