Lastly, guess what happens to a successful business owner and investor in 2013 as the Bush era tax cuts expire.
Putting aside the numerous potential increases in state income tax rates and sales tax rates being proposed this fall, successful entrepreneurs and investors may endure a number of chilling changes (per David Rosenberg of Gluskin Sheff):
A) An increase in their top federal income tax rate from 35% to 39.6%;
B) A reduction or removal of various itemized deductions adding a further 1.2% increase in their top federal income tax rate;
C) Potentially a new 0.9% Medicare tax imposed on incomes over $200,000 ($250,000 for couples);
D) An increase from 15% to 20% on the long-term capital gains tax rate;
E) Dividends will be taxed at 39.6% for top income earners, not the 15% we have enjoyed for the past ten years;
F) High income earners will also be subjected to a new 3.8% tax on investment income; and
G) The top estate tax rate goes from 35% to 55%, while the estate tax exemption falls to $1 million from $5 million.
So kudos to any corporate tax reform plan that helps engage an informed debate and highlights areas of potential improvement in our nation's economy. If only politics and the inability to focus on "the real issues" wouldn't get in the way of real reform.
Be sure to tune into CNBC’s “Squawk Box” and “Worldwide Exchange” on Wednesday, February 29th for our exclusive, live coverage from YPO’s Global Leadership Summit in Singapore.
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