Cocktails & Talking Taxes

by Stephanie Berenbaum – September 23, 2010

Get the Gist of the Tax Plan Debate

All you hear on the news today is party talk – the Republican Party, the Democratic Party, and the now infamous Tea Party, but I want to talk about the one party we will all most likely agree on – the COCKTAIL PARTY!  And yes, this is still an article about taxes...  So, what on earth do taxes and cocktails have in common?  Well, for the purposes of this piece, we’re going with a scenario you may well find yourself in this weekend…

Party People

Picture this…  You’re at a cocktail party, and the super heated subject of the current tax debate comes up.  The most gorgeous guy you’ve seen in ages turns to you and asks your opinion of the situation (Yes this is reality…  Are you prepared?).  Well, if you don’t already have a grasp on the issues, here are the basics of what you need to know for your own sake as well as to help impress Mr. Gorgeous!

What’s All the Fuss?

The heated debate between parties centers around the Bush Tax Cuts, that were put in place in 2001, and are due to expire on Dec 31st. The meat of the argument has boiled down to this:  will the tax cuts be renewed for everyone, or for everyone EXCEPT the richest two percent of Americans? And which scenario has the best shot at aiding our ailing economy?  If Congress takes no action, taxpayers at every income level face significant tax increases next year.

Who Are the Richest 2%, Anyway?

Ok, so you’re still looking at Gorgeous Guy – if nothing else, you can say without a doubt he is definitely in the top two percent – looks wise! But I digress.… If you live in a major city your view of ‘super rich’ might well be skewed.  You might be thinking the richest two percent are those making over – what – ten million? Surprise! It’s actually $200,000 for individuals and $250,000 for couples.

What The Parties Actually Agree On

Well, if there is one silver lining to the economy being in the dumps, it’s that both parties can actually agree – they don’t want to raise taxes on the vast majority of Americans!  In general, both sides agree that renewing the Bush Tax Cuts for Americans earning under $200,000 a year, is a good idea.  Chances are, you probably fall into this group, thus your personal taxes won’t go up. But, what about ….

That Gorgeous Rich Guy

As you envision your future together on a vineyard in Napa, you can’t help but think… What does this all mean for Gorgeous Rich Guy?  Remember we’re still hoping that Gorgeous Guy is in that top two percent! If he is, his taxes will actually go up under the Obama plan.   So instead of paying the 35% income tax that he pays now, his taxes will increase to 39.6%.

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