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Taxing teens
The $69 billion tax cut bill that President Bush recently signed tripled tax rates for teenagers with college savings funds, despite Bush's 1999 pledge to veto any tax increase.
Under the new law, teens ages 14 to 17 with investment income will be taxed at the same rate as their parents, not at their own rates. Interest that had been taxed at 10 percent will now be taxed at as much as 35 percent.
In order to give tax cuts to oil companys and millionaires somebody has to pay. Why not make the teenagers pay more? They don't vote, so what's the harm?
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The “Tax the rich” crowd should be cheering over this. If you complain about tax cuts for the rich you should be celebrating.
The only ones getting hit are those wealthy folks that have been using the “kiddy tax” loophole to shelter investment income by putting things into their kid’s name. It affects unearned income over $1700 and does not affect wages earned from flipping burgers and mowing lawns. Does your kid make over $1700 in interest on his savings account?
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The kiddie tax was created nearly 20 years ago. It affects a child's unearned income - typically interest, dividends and capital gains. It doesn't apply to money a child earns on a job.
As it now stands, the tax applies to children under age 14. The first $850 of a child's unearned income isn't taxed. The next $850 is taxed at the child's rate. Anything above that is taxed at the parents' rate.
http://www.baltimoresun.com/business...ting-headlines |