Obama’s tax hikes affect North Tahoe’s affluent
INCLINE VILLAGE, Nev. ” As national legislators make their way through President Barack Obama’s budget, some North Lake Tahoe taxpayers are worried about how his tax plans could affects their bottom line.
“Most of the clients we have are pretty high net worth people and they are the ones who are going to get hammered,” said Jeff Quinn, a shareholder in Ashley Quinn, CPAs and Consultants, with offices in Incline Village and Reno.
Like Quinn, Tahoe City accountant David Brown said some of his clients are concerned about President George W. Bush’s tax cuts expiring at the end of next year.
If the tax cuts expire, the top income tax rate ” which for a couple filing jointly kicks in on income above $373,000 a year ” would increase from 35 percent to 39.6 percent, the rate in place when Bill Clinton was president.
The second highest rate ” on marginal income between $209,000 and $373,000 ” would increase from 33 percent to 36 percent.
“The problem is, we don’t know what’s going to happen yet,” Brown said.
Last Week Senate Finance Committee Chairman Max Baucus, D-Mont., introduced legislation that would make certain tax breaks permanent for taxpayers making less that $200,000 a year. However, it does not make tax breaks for those making more than $200,000 a year permanent.
In the North Lake Tahoe area about 1,862 people earned more than $200,000 in adjusted gross income in 2006, according to the Internal Revenue Service.
Some of those people make up the majority of Quinn’s clients, and he said they are depressed by the possibility of higher taxes.
“Looking back, 2008 was just a horrible year ” pretty much every client we have that has investments suffered enormous losses,” Quinn said. “That recent history combined with the expectation that whatever people have left is going to be taxed even more heavily is even more depressing.”
However, Brown said all taxpayers will be affected by the economic policies being considered if they are passed.
“I think we will see higher taxes in the future,” Brown said. “Not only for those earning more than $250,000, but for those who are earning less the reductions in deductions will result in higher taxable income and therefore higher taxes.”
Before leaving for Europe Tuesday, Obama held meetings with House Democrats Monday night to press them to pass his budget plan.
That budget plan and the current economy is on the minds of many people Brown speaks to, he said.
“I think right now people are more concerned about the economy and trying to get through this difficult time,” Brown said. “People are aware there is change ahead and looking for strategies on what you can do to reduce your taxable income.”
In 2006 North Lake Tahoe 1,862 tax payers earned more than $200,000. Those same 1,862 taxpayers could face higher taxes if tax cuts enacted in 2001 expire next year. Here’s how the taxpayers break down by city:
Incline Village, Nev. ” 892
Truckee, Calif. ” 431
Crystal Bay, Nev. ” 283
Tahoe City, Calif. ” 181
Carnelian Bay, Calif. ” 25
Kings Beach, Calif. ” 24
Tahoe Vista, Calif. ” 16
Source: Internal Revenue Service, Statistics of Income Division