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From: dgh@sun.UUCP
Newsgroups: net.taxes,net.invest
Subject: Re: Marginal Tax Rates and the Senate Tax Bill
Message-ID: <5765@sun.uucp>
Date: Sun, 3-Aug-86 14:36:21 EDT
Article-I.D.: sun.5765
Posted: Sun Aug  3 14:36:21 1986
Date-Received: Sun, 3-Aug-86 23:56:43 EDT
References: <5314@sun.uucp> <2352@cbosgd.UUCP>
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Organization: Sun Microsystems, Inc.
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cbosgd!mark writes...

> Let me get this straight.  If I'm married and our combined income
> is under $75,000, we'll be taxed at the 15% rate?  Sounds to me like
> that covers most of the middle class.  I'm not in any danger of
> breaking into the 32% bracket in the forseeable future.  (Send job
> offers at over $75K to...)
> 
	I mentioned particularly married couples both of whom work,
which is the norm around here.  Even public school teachers can
be making > 75000 combined salary since they all have enormous
seniority.  Engineers do somewhat better than that.  Combine salary
with gains from selling stock or appreciated real estate and you
get into interesting tax situations.

> Which "income" does this refer to?  Gross receipts, before (schedule C)
> business expenses?  Adjusted gross income?  AGI after exemptions?  Taxable
> income after deductions?
> 
	The discontinuity that the phasing-in tax brackets address is
in taxable income, which =
adjusted gross income - deductions - exemptions,
so the phasing in should logically be based upon
taxable income.  Instead, it's based on adjusted gross income, which  =
total income - adjustments to income.

> Another thing I've been wondering.  There is so much worry about the IRA
> being deductable, yet there has never been any question about the 401K.
> Even under the latest horror threat from the House-Senate group, they
> would limit the 401K to $5000/year, which is 150% better than an IRA.
> The 401K does stay deductable, doesn't it?  Or are they going to tax our
> contributions to it, too?

House and Senate both limit 401K to 7000.  House also limits IRA+401K to
7000.  Amounts within limits are deductable same as currently.  I haven't
heard if the conference committee has reached agreement on this.