Authorities are developing a budget for the next fiscal year
It seems that our politicians only know how to do one thing well - raise taxes. Now the budget for the next fiscal year is being developed (for the state it will begin in October) and again there is a whole war going on among politicians, all because of taxes. The following are offered:
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Raise the top marginal rate on long-term capital gains and dividends to 44,6% for income over $1 million (up from 23,8% now)
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Eliminate the “stepped-up basis” rule, which allows favorable tax treatment for inherited assets. Current rules provide an exemption from capital gains tax on assets that the taxpayer does not sell before the end of his life. But they want to add exceptions to the rules in the amount of $5 million in profit per person and, in fact, $10 million per married couple.
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The budget again aims to eliminate so-called "1031 like-for-like exchanges" of more than $500 for single taxpayers or $000 million for married filers filing a joint return. Under current law, if certain conditions are met, a property owner can sell and buy another property for a business or investment purchase and defer paying taxes on the original gain.
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It is proposed to increase the corporate tax rate from 21% to 28%. As a reminder, most small businesses are pass-through and not subject to corporate income tax, but for companies that are subject to income tax, the increase will make a difference.
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It also proposes to increase the tax rate on investment income from 3,8% to 5%, but only for those with income over $400.
Author: Elina Linderman
