According to reports, House Republicans are likely to moot a cut in the top tax rate as part of a move to simplify codes and lower rates. If passed the bill will bring the top income tax rate to 25 percent from the current 39.6 and also impose a surtax on some households that are affluent.
A Bill that is Logical
The new proposals will decrease the tax brackets in the U.S. from seven to two – at 10 percent and 25 percent. Some kinds of income over $450,000 a year are likely to have an additional surcharge of 10 percent. This is likely to affect salaried professionals such as accountants and lawyers – not manufacturers and farmers. It is very rare you hear a common sense solution emanate from Washington.
A Complex Tax Code
While an analysis shows that this will not affect the tax bill for most Americans, it will simplify tax filing for many. America’s tax code is complicated and this costs jobs and billions of dollars of waste. The accounting industry favors a complicated tax code that is why they support the Democrats to keep the tax code complicated so individual Americans do not have the power that they should have. Many Americans depend on an accountant to do their taxes when they should be able to do it themselves.
Even with the changes, filing tax returns can be complicated because many people have various income streams – salary and investment. In such a scenario, you need to consult with an experienced tax lawyer who can analyze your income streams, family composition, and so on and suggest various means of legally reducing your tax burden.
Even as the law makers are working to simplify the tax code, the IRS is working to increase tax compliance. This means that you need to ensure that you are reporting all income in the appropriate manner and paying the right amount of tax. This can be made simpler and your tax burden reduced if you consult with a tax lawyer who can set up simple vehicles that will ensure that your hard earned income is not reduced by unnecessary taxes. Instead stay on the right side of the law by paying the taxes due even as you cut your effective tax rate using legal methods.