- Post 13 April 2012
- By Copy Editor
The highest-earning U.S. households have ways to escape President Barack Obama’s Buffett rule with tax-planning techniques that would limit their liability and undermine the proposal’s purpose.
Those affected taxpayers -- the fewer than 0.5 percent of Americans with annual incomes exceeding $1 million and tax rates of less than 30 percent -- could take advantage of tax-free investments such as municipal bonds to escape the Buffett rule’s bite. They also could time asset sales for maximum tax benefits, engage in transactions that don’t result in taxable income and make charitable contributions that yield deductions.
The proposal would deny high-income taxpayers many deductions and other breaks they use to drive down their average tax rate without closing out the tactics employed by the wealthiest, most sophisticated taxpayers.
The Buffett rule, named for billionaire investor Warren Buffett, would require that taxpayers with at least $2 million in adjusted gross income pay a minimum rate of 30 percent and would impose the increase on a sliding scale for those with income between $1 million and $2 million....continues...