As noted above, the basic approach followed in this study was a comparison of the taxable incomes of individual taxpayers who reside in different states and confront unequal state income tax rates.
Mean taxable incomes according to income grouping in the high- and low-tax state samples are reported in Table 1.(7) In all but the lowest income category, average taxable income is relatively lower in states with higher tax rates on individual income.
Beginning in 1994, when individuals lose the "below the line" deductibility of club dues, certain lobbying expenses and 50% of meals and entertainment deductions, their regular taxable incomes will be closer to their AMTI.(10) Also, since certain tax preparation fees,(11) moving expenses and a portion of self-employed health insurance will be deductible "above the line," a taxpayer will no longer need to make an AMT adjustment, thus decreasing the individual's exposure to the AMT.
Individual taxpayers must now calculate their 1993 AMT at a 26% rate for the first $175,000 of alternative minimum taxable income (AMTI) above the AMT exemption, and at a 28% rate for amounts over that.(2) (2)RRA Section 13203(a) amending Sec.
For 1993, the income tax rate increases to 36% for married couples with combined taxable incomes
of more than $140,000; for single individuals, this rate applies to taxable incomes
of more than $115,000 (for heads of households, taxable income
must exceed $127,500).
The top tax rate of 31 percent applies to taxable incomes
over $82,150 for married taxpayers filing jointly and $49,300 for single taxpayers.
1, 1993, apply to married taxpayers with taxable incomes
in excess of $140,000, and all individuals with taxable income
in excess of $250,000, respectively.
A 36% tax bracket will be added to the existing three and will apply to joint filers with taxable incomes
of more than $140,000 and to single filers with taxable incomes
951 to include their portion of the CFC's subpart F income in their taxable incomes
did not include any municipal bond interest earned by that CFC.
179 expenses against the taxable incomes
from those businesses.