Washington (July 22, 2004) -- The nation’s high-income earners would shoulder the major burden of funding Democratic presidential candidate John Kerry’s revised tax agenda, according to an analysis by Big Four firm Deloitte & Touche.
A high-income couple with substantial investment income could expect to lose thousands of dollars in tax savings under the Kerry plan, as the marginal income tax rate on dividends for those individuals could jump from 15 percent to 39.6 percent, according to Clint Stretch, Deloitte’s director of tax policy.
Over the past four years, President George W. Bush has twice signed legislation reducing individual income tax rates on income in all tax brackets. During his current campaign for the White House, Senator Kerry, D-Mass., proposed curtailing Bush’s tax rate cuts in the 33 percent and 35 percent individual income tax rate brackets, and eliminating capital gains and dividend rates for families with aggregate income over $200,000. The resultant revenue, according to Kerry strategists, would in turn make health care more affordable and accessible.
According to Deloitte, a family of four with income of $40,000 and annual savings of $2,000 under the current Bush tax cut plan would lose nothing under Kerry’s plan. However, a family with wage and investment income of $265,000 that receives roughly $7,200 in annual savings under the Bush tax cuts would lose over $5,300 -- about 73 percent -- of the relief if the Kerry tax plan became effective for all of 2004.
“Even under current law, taxpayers can expect future tax increases -- without any changes to the law,” said Stretch. “The Bush tax cuts at this point are still temporary. So if Congress fails to intervene before the cuts sunset, everyone can expect a larger tax bill in the future, regardless of what any Democratic candidate may do.”
-- WebCPA staff
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