James B. Stewart is a legally trained, middle-aged guy who teaches business journalism in New York and writes about business and society in the New York Times and other publications. He obviously makes a pretty good living, but not what we'd call anything near the 1%. He figured out, to his horror, that he is a one-percenter (and worse!) in terms of the taxes he pays if not his income.
Stewart went back and combed through his 2010 tax returns and wound up "reeling from the results."
I paid 24 percent of my adjusted gross income in federal taxes and 37 percent in combined federal, state and local income taxes. I paid 49 percent of my taxable income in federal income tax, and 74 percent of my taxable income in combined federal, state and local income taxes. My totals include federal payroll and self-employment taxes.
When I reported the results to a few prominent tax experts, they were initially incredulous. “That’s very, very high,” said Robert Willens, a tax lawyer. “Congratulations.” ...NYT
"It turns out," he writes, that my individual circumstances are a near-perfect storm of punitive tax policies. Nearly all my income is earned, as opposed to capital gains, carried interest or dividend income taxed at a lower rate."
Stewart lives in a high-tax area -- high state and local taxes.
Because I have nonemployee income, like book royalties, I also pay the unincorporated business tax on top of other income taxes, which costs me an additional 5 percent of adjusted gross income. And because my deductions are high relative to my total income, mostly because of the state and local income taxes I pay, I’m hit hard by the alternative minimum tax. ...NYT
He wants to hear from you if you have a similar story.
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This just in at the New York Times: James Stewart did, indeed, "hear from" someone. Get this, taxpayers -- he's been contacted by a guy in New York who pays 102%!
James Ross, 58, is a founder and managing member of Rossrock, a Manhattan-based private investment firm that focuses on commercial real estate and distressed commercial mortgages. “I realize I am very fortunate, and in fact I am a member of the 1 percent,” Mr. Ross wrote in an e-mail. His résumé is studded with elite institutions: Yale, Columbia Law School and stints at the law firms Cravath, Swaine & Moore in New York and Holland & Hart in Denver. Since his company fits the category of private equity, he even has carried interest, the kind of incentive compensation that enabled Mitt Romney to pay such a low tax rate.
Yet Mr. Ross told me that he paid 102 percent of his taxable income in federal, state and local taxes for 2010. “My entire taxable income, plus some, went to the payment of taxes,” Mr. Ross said. “This does not include real estate taxes, sales taxes and other taxes I paid for 2010.” When he told friends and family, they were “astounded,” he said. ...NYT
