Monday, March 8, 2010
The 2009 income tax rate will not be raised too drastically much because of the world wide recession. The rate at which congress raises taxes each year is determined by inflation. In 2009, inflation was at 0.19%, the unemployment rate hit 10%, consumer spending hit all time lows, and energy prices remained low all year.
What most Americans have forgotten about was the tax rates just 10 years ago. The brackets were 15%, 28%, 31%, 36%, and 39.6%. This is higher than the current rates which are 10%, 15%, 25%, 28%, 33%, and 35%. There is an extra bracket now, but the rate at which the wealthiest are taxed is still lower than it was 10 years ago.
In an unexplained twist, the tax rates 20 years ago were like how the corporate taxes are now. The wealthiest did not have the highest tax rate. There were only 3 tax brackets being 15%, 28%, 33%, then back to 28%.
With every tax reform act comes a new set of laws and brackets. But nothing compares to the mass confusion of the 1978 revenue act. There were 16 different tax brackets from 0% all the way up to 70%.
Someday, the government might get wise and realize that less is better when it comes to tax laws and the rate the citizens must pay. But until that time arrives, the income tax rate will continue to rise as compared to the tax payer's income.
Of course, the above is not legal or accounting advice -- it is for informational purposes only. Before making any decisions regarding legal or tax matters, it is vital that you consult a licensed professional lawyer or tax accountant.
It is critical to get licensed advice when dealing with income tax law and related matters. Research on the Internet is a wonderful method for keeping your hourly attorney bills low, but always check your findings with a licensed attorney or accountant before making any financial or business decisions. If you need more information about an income tax audit
Article Source: http://EzineArticles.com/?expert=Mark_Y._Salmon
