Tax Legislation We Peel The Onion ™

New federal tax legislation raises maximum rates 560 basis points to 39.6% on taxable income over $450,000 for married, joint filers ($400,000 for individuals), plus a hidden approximately 100 basis points in the form of itemized deduction reductions.  The maximum marginal federal tax rate on ordinary income is now effectively approximately 41%.  Rates also rise 500 basis points to 20% for long-term capital gains and qualified dividends.  The law also makes permanent the approximately $5 million lifetime unified gift and estate tax exemption.  President Obama wants additional tax increases through the elimination or curtailment of certain deductions, possibly for charity, mortgage interest and taxes.  Stay tuned.”