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Tuesday, November 27, 2012

Tax Prof Poll: Taxes and the Fiscal Cliff

From a survey of 59 tax professors on the TaxProf Email Discussion Group by Robert G. Nassau (Syracuse):

1. The Fiscal Cliff:

Congress will act before Dec. 31, so we do not go over the Fiscal Cliff:  54.2%
Congress will not act before Dec. 31, but will act shortly after we go over the Fiscal Cliff:  42.4%
Congress will never act, and the Fiscal Cliff will go into force permanently:  3.4%

2. The highest marginal tax rate on ordinary income in 2013 will be:

Less than 35%: 1.7%
35%:  15.3%
More than 35% but less than 39.6%:  37.3%
39.6%:  40.7%
More than 39.6%:  5.1%

3. The highest marginal tax rate on long-term capital gain in 2013 (not counting the Medicare Tax) will be:

Less than 15%:  1.7%
15%:  22.0%
More than 15% but less than 20%:  10.2%
20%:  59.3%
More than 20%:  6.8%

4. The highest marginal tax rate on dividends in 2013 (not counting the Medicare Tax) will be:

Less than 15%: 1/7%
15%:  13.6%
More than 15% but less than 20%:  11.9%
20%:  39.0%
More than 20%:  33.9%

5. Which of the following tax expenditures will be eliminated or curtailed (check all that apply):

No elimination or curtailment [27]
Employer-paid health insurance [9]
Mortgage interest [17]
401(k) and other pensions [2]
Charitable contributions [11]
State/local taxes [14]
Earned income tax credit [6]
Child tax credit and/or dependency deductions [7]

6. True or false: all deductions will be preserved, but they will be phased out or down for higher-bracket taxpayers.

True:  86.0%
False:  14.0%

7. The highest marginal tax rate, whatever it may be, will apply to joint filers with taxable income exceeding:

$250,000 [currently taxed at 33%]:  29.3%
More than $250,000 but less than $388,350:  12.1%
$388,350 [where 35% rate begins under 2012 law]:  34.5%
More than $388,350:  24.1%

8. The Estate & Gift Tax:

Will be eliminated:  1.7%
Will apply to estates over $1,000,000:  5.2%
Will apply to estates over $3,500,000:  47.4%
Will apply to estates over $5,120,000 [2012 law]:  47.4%
Will apply to estates over some amount greater than $5,120,000:  0%

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Comments

Anyone that can do simple math or balance a checkbook should know the nation is insolvent. It's not rocket science. It's fraud.

Posted by: robertsgt40 | Nov 27, 2012 12:30:56 PM

Do tax law professors think that the "Fiscal Cliff" refers only to the expiration of the Bush tax cuts? It's the "sequestration" of 20% of some federal expenditures that presents a greater danger to our economy. Mostly by coincidence, the self-imposed deadline for extending some or all of current tax breaks, and the self-imposed deadline for agreeing on a federal budget, happen on the same date.

Posted by: Bob | Nov 27, 2012 3:15:51 PM

Thanks for posting this, I've been trying to explain 1) that we have to retain capital gain/dividend parity and 2) the estate and gift apocalypse won't happen (because of logistics for those who have already used up their exemption). These results at least partially support my theories.

Posted by: AT | Nov 28, 2012 1:05:12 PM