Business

US Wealthy To Face Higher Income Taxes

Published

15 years ago

July 24, 2009

It’s probably never a bad time to be rich. But the good times for America’s wealthy could soon be a little less so.

President Barack Obama wants to boost income taxes for the wealthy to pay for tax cuts for everybody else. He wants to limit the deductions that high-income families take for mortgage interest and charity contributions to help pay for providing more people with health insurance.

House Democrats are planning to hit the wealthy with even higher income taxes to pay for their version of a health care overhaul.

Between the plans, a family of four with an income of $5 million a year would see its annual income taxes skyrocket by more than $440,000. A similar family making $800,000 a year would get a tax increase of $30,000, according to an analysis by the financial services firm Deloitte Tax.

“I still think being wealthy is better than being poor,” Clint Stretch, who heads tax policy at Deloitte Tax, said with a touch of understatement. “But this is a pretty high proposed tax burden.”

Taxing the rich to pay for health insurance would represent a significant departure from the way Americans have financed safety net programmes in the past.

Both Social Security and Medicare are supported by broad based payroll taxes. Although the rich pay more — they have bigger incomes — the burden is shared by the middle class and even the working poor.

By contrast, the health care plan working its way through the House would impose $544 billion in new taxes over the next decade on just 1.2 percent of households — joint filers making more than $350,000 a year.

The bill would impose a new 5.4 percent income surtax on couples making more than $1 million a year, starting in 2011. Couples making more than $350,000 would have to pay a surtax of 1 percent tax and those making more than $500,000 would pay a 1.5 percent surtax.

If certain savings in the health care system are not achieved by 2013, the surtax would rise to 2 percent for families making more than $350,000 and to 3 percent for those making more than $500,000.

For a family of four making $450,000 a year, the initial tax increase would be $1,000, according to the Deloitte analysis. But for the super rich, like a single filer making $5 million a year, the tax increase would be $452,000. The analysis assumes a typical mix of earned income, capital gains and itemised deductions for each income level.

Democrats said that for most of the affected taxpayers, the surtax would be far smaller.

“What we’re talking about is frankly very, very small amounts for the overwhelming majority of people who will pay it,” said Rep. Artur Davis, D-Ala.

The top marginal income tax rate now is 35 percent, on income above $372,950. Obama wants to boost the top rate to 39.6 percent in 2011 by allowing some of the tax cuts enacted under former President George W. Bush to expire.

The House Democrats’ proposed health care surtax would increase the top rate to 45 percent, making it the highest top rate since 1986, when it was 50 percent.

Republicans complain that some taxpayers would face marginal tax rates above 50 percent, when federal and state taxes are combined. They also say that tax increases on the wealthy hurt small business owners who typically pay their business taxes on their individual returns.

Democrats say the tax increases would affect only 4.1 percent of tax filers who report small business income. Those small businesses, however, tend to be the ones that employ the most workers, according to data from the National Federation of Independent Business.

“We shouldn’t have to resurrect the 1970s to remember that when tax rates go too high, people lose the incentive to build new businesses and create jobs,” said Rep. Wally Herger, R-Calif. “These massive tax increases are no substitute for real fiscal responsibility.”

Obama has tried to make the rich a popular target for tax increases as Democrats struggle to find ways to pay for his plan, intended to assure that virtually everyone gets health care. He regularly portrays the wealthy as big winners under Bush, noting that their taxes dropped and incomes soared during Bush’s eight years in office.

“I think the best way to fund (health care) is for people like myself who have been very lucky, to pay a little bit more,” Obama said recently.

The argument, however, omits the fact that Bush also cut taxes for middle- and low-income people. Their incomes didn’t jump as much as they did for the wealthy, but effective federal tax rates for middle-income and low-wage workers are at or near 30-year lows.

This year, 47 percent of filers won’t owe any federal income taxes — including some families making as much as $50,000 a year, according to separate projections by the Tax Policy Centre and Deloitte Tax.

“Right now, if you are middle class or below, you are not expected to help pay to solve these problems,” said Stretch, the tax policy adviser.

Business

NIGCOMSAT Seeks Policy To Harness AI Potentials

Published

2 days ago

December 20, 2024

The Tide

The Nigerian Communications Satellite Limited (NIGCOMSAT), the country’s satellite operator, has called for immediate promolgation of policy action that will enable the country to harness the potentials of Artificial Intelligence (AI).
NIGCOMSAT, also warned that Nigeria risks missing out on Africa’s projected $1.2trillion share of the global AI economy by 2030.
Managing Director of NIGCOMSAT, Nkechi Egerton-Idehen, disclosed this in a statement issued at the weekend following her participation in the Meeting of the National Council for Communications, Innovation, and Digital Economy.
“Artificial intelligence is reshaping industries, economies, and societies worldwide, with projections that it will contribute up to $15.7trillion to the global economy by 2030. Africa stands to gain $1.2trillion of this if the right policies and innovations are in place”, Idehen said, citing a PricewaterhouseCoopers report.
The NIGCOMSAT MD underscored the transformative potential of AI in agriculture, highlighting its applicability in Benue State, widely regarded as Nigeria’s “food basket.”
According to her, machine learning tools could revolutionize agricultural practices by improving pest detection and optimizing planting schedules using satellite imagery.
“AI offers us the chance to not only flourish economically but also to achieve food security. However, we must ask ourselves if we are prepared to manage this technology responsibly”, she added.
Idehen also noted that internet access remains a significant barrier to AI adoption in Nigeria.
“For AI tools to be effective, basic digital infrastructure is essential. Addressing this gap must be a priority.
“AI is happening. We have the opportunity to manage this technology revolution responsibly, both in Africa and globally, through innovation and governance”, she said.
In August 2024, the Federal Ministry of Communications, Innovation, and Digital Economy released a draft National Artificial Intelligence Strategy, aiming to position Nigeria as a global leader in AI.

Corlins Walter

Business

We Have Spent N1bn On Electrification -LG Boss

Published

2 days ago

December 20, 2024

The Tide

The Chairman of Emohua Local Government Council, Chief David Omereji, has said the council has so far spent over N1 billion for the electrification of communities in the area.
Omereji said this while addressing staff of the council at the council headquarters recently.
He said the move was part of his administration’s resolve to ensure peace and development of the LGA.
According to him, the Council spent about N29 million on monthly basis for the maintenance of the Emohua Local Vigilante group known as OSPAC, with each member being paid a stipend of N100, 000 monthly.
He diaclosed that 11 out of the 14 wards are currently enjoying electricity, while efforts are on to light-up the remaining ones.
“I also want to use this opportunity to inform the political class for purposes of records and for the understanding of the people that the Council under my watch have done more than enough”, he said .
The Emolga boss explained that all that have been achieved were through the personal effort of the Council, without support from anybody as rumoured in some quarters.
Omereji further reaveled that a number of other projects, including roads, fencing of schools, hospitals, courts premises, and reconstruction of some abandoned buildings at the Council Headquarters are being undertaken by his administration.
He enjoined the people of the area to support his administration’s drive to bring purposeful development to the LGA.
The Emohua Council boss, who reiterated his hatred for noise making, stated that his works would speak for him, and solicited the support of staff of the council and the entire people of the area.
He noted the fact that some people may not be happy with his achievements, saying that he would remain focused, while advising critics of his government to do so constructively with facts and figures.

King Onunwor

Business

Ogoni Rejects NNPC-Sahara OML11 Deal … Wants FG’s Intervention

Published

2 days ago

December 20, 2024

The Tide

The Movement for the Survival of the Ogoni People (MOSOP) has raised some ethical questions over a Financial and Technical Services Agreement (FTSA) between Sahara Energy and West African Gas Limited (WAGL), an affiliate of the Nigerian National Petroleum Company (NNPC).
MOSOP said the agreement was not done in good faith, not in the interest of the Nigerian people, and did not follow due process.
Foremost Ogoni born activist and MOSOP leader, Fegalo Nsuke, who made this known in Abuja, weekend, described the Sahara-WAGL deal as fraudulent, deceptive and an insult on the intelligence and integrity of the Nigerian nation.
Nsuke called on President Bola Ahmed Tinubu to cancel that FTSA between Sahara Energy and WAGL, noting that the agreement is fraught with irregularities and deceptive.
“What Sahara and the NNPC did in the FTSA between Sahara and WAGL is shameful and depicts high level corruption in public service of our country.
“WAGL is an affiliate of Sahara and the NNPC. How then can Sahara go into an agreement with its own affiliate? It’s as good as going into an agreement with itself. This is deceptive and fraudulent”, Nsuke said.
He continued that “Sahara Energy is certainly not a company the Ogoni people want on their soil and we are calling on Mr. President, Bola Ahmed Tinubu, to terminate any deal between the NNPC and Sahara Energy over OML 11, and to allow for an inclusive arrangement that considers a fair treatment of the Ogoni people in the distribution of revenues from natural resource extraction on Ogoni soil.
“The last Ogoni Congress has been unequivocal on the Ogoni demand for justice and has given a clear path to resolve the three decade old conflict between all critical parties.
“It will be good to explore this path to peace and development for Ogoni and for our country”.
Nsuke accused Sahara Energy and the NNPC of frustrating the progress made by MOSOP to achieve a permanent solution to the Ogoni problem.
He urged a presidential intervention with deep consideration for a fair treatment of the Ogoni people in order to permanently address the problem.
He noted that Sahara Energy should give up on the Ogoni area to allow for an engagement in the interest of the country and the people.
Recall that MOSOP and Sagara Energy have recently been engaged in a row in what MOSOP describes as an unholy relationship between Sahara Energy and the NNPC over OML 11.
MOSOP expressly rejected Sahara Energy and called for a fair treatment of the Ogoni people in natural resource extraction in Ogoni.
It noted that Ogoni people, led by MOSOP, paid the sacrifice to take the oil from Shell, hence “the position of MOSOP must be taken into consideration in decisions relating to resumption of oil production in Ogoni”.