$250,000 Income Tax Threshold
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Why is $250,000 the magic number?
There has been much debate with regards to how to close the budget deficit. With President Obama's fix saying that federal income taxes should be increased for households making more than $250,000.
The questions is, how did this become the threshold between being considered wealthy or middle class? Many people are questioning whether or not a household making more than that are truly wealthy enough to be taxed at the same bracket as millionaires.
This number seems to have a political basis. The dividing line originally appeared in 1993 when Clinton started a new tax bracket at 250,000 with a rate of 39.6%.
Meanwhile, President Obama first started using the $250,000 household income level to define who is wealthy in 2008. The proposed top household income tax bracket starts at $250,000 and would pay 39.6 percent on federal income. Single filers who make $200,00 or more would also be in the highest bracket. Currently, the highest tax bracket starts at $379,150, and they pay 35 percent so this would be a significant increase.
Aides that have worked with President Obama said he liked the $250,000 threshold because it helped bring back the feelings of President Clinton?s era of economic prosperity in the 1990s.
But the question remains as to whether or not this is the best dividing line between the wealthy and middle class. As most making this amount of income do not necessarily feel rich in comparison to the millionaires they are being lumped in with.
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About the Author: Stephanie Horne My company, Horne Financial Services, offers a wide range of bookkeeping services while my website is a great resource full of bookkeeping tips that can help save you money, including an online store offering great discounts on bookkeeping software and bookkeeping supplies as well as an accounting definitions glossary and a bookkeeping questions and answers forum. Below are the services that I offer to my clients along with a brief description. As the list below is by no means all-inclusive, please feel free to inquire about a bookkeeping service if you do not see it listed. If it is not a service I provide, I would be happy to refer you to a qualified professional. * Online Tax Preparation * Tax Services * Bookkeeping/Write-Up Profit and Loss Statement * Balance Sheet * Financial Forecasts & Projections * Cash Flow & Budgeting Analysis * Compilations * Accounts Payable * Accounts Receivable. For more information please visit my Bookkeeping FAQ page. Thank you and all the best to you! Click here to visit Stephanie's website.   Free Online Bookkeeping Course Webmaster Business Course |
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