A TAXING SUBJECT
According to the latest information published by the IRS you need to earn over $464,682 to be a 1%-er.
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Income
|
2012 AGI
|
% of All Income
|
% of Income Taxes Paid
|
Aggregate %
of Taxes Paid
| |
Top 1%
|
Over $464,682
|
21.9%
|
38.1%
|
38.1%
| |
Top 5%
|
Over $175,817
|
14.9%
|
20.9%
|
59.0%
| |
Top 10%
|
Over $125,195
|
11.1%
|
11.2%
|
70.2%
| |
Top 25%
|
Over $73,354
|
21.4%
|
16.2%
|
86.4%
| |
Top 50%
|
Over $36,055
|
19.6%
|
10.8%
|
97.2%
| |
Bottom 50%
|
Under $36,055
|
11.1%
|
2.8%
|
100%
|
Where do you fall in?
The bottom 50% of taxpayers only paid 2.8% of all income taxes, and even that is high, because many of these taxpayers received the earned income tax credit ("EITC"). The Treasury accounts for the EITC as a transfer payment rather than a reduction of taxes paid.
As you view this data please keep in mind that it is based on tax returns actually filed in 2012 by persons who pay taxes. Mitt Romney advised that 47% of the population does not pay income taxes. Those people are not included in the above statistics. It would be interesting to ascertain what percent of the taxes paid are distributed to the 47% who did not pay any taxes.
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BENEFICIARY DESIGNATIONS
Many financial assets may be distributed to your heirs upon your death by naming them as a pay-on-death beneficiary. These include IRAs, 401ks, 403bs, bank accounts, life insurance, annuities, mutual funds and other investments.
The use of beneficiary designations is attractive because it is simple, convenient, avoids probate and avoids the trouble and expense of a formal estate plan. It may also create an economic disaster upon your death. For example, if your entire estate passes by beneficiary designation, where are the funds necessary to pay your final expenses and wind-up your affairs?
What if a beneficiary predeceases you, then where does the money go? You want your legacy to benefit these beneficiaries, but what if they are in a position where the inheritance won't be used as you would desire? Will the money eventually go to people who should not have it? (e.g. a spouse's children from a previous marriage or a divorcing spouse).
Does the beneficiary have the skills to properly manage the inheritance?
Is the beneficiary legally unable to manage the inheritance because of youth, advanced age or infirmity and so the inheritance will be subject to someone else's control?
Will the beneficiary lose public benefits because of the inheritance?
Is the beneficiary in a risky profession and subject to possible lawsuits?
Does the beneficiary have a substance abuse problem?
Before embarking on a do-it-yourself estate plan using only beneficiary designations, careful thought must be made as to your actual intent. A well drafted estate plan, including a trust, can assure your intent is met.
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Will Rogers died in a 1935 plane crash. He was one of the greatest social commentators this country has ever known.
Some of his sage advice:
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Never slap a man who's chewing tobacco.
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Never kick a cow chip on a hot day.
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There are two theories to arguing with a woman. Neither works.
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Never miss a good chance to shut up.
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Always drink upstream from the herd.
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If you find yourself in a hole, stop digging.
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The quickest way to double your money is to fold it and put it back into your pocket.
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There are three kinds of men:
The ones that learn by reading.
The few who learn by observation.
The rest of them have to pee on the electric fence
and find out for themselves.
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Good judgment comes from experience, and a lot of that comes from bad judgment.
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Letting the cat outta the bag is a whole lot easier'n puttin' it back.
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After eating an entire bull, a mountain lion felt so good he started roaring. He kept it up until a hunter came along and shot him. The moral: When you're full of bull, keep your mouth shut.
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