IRS Targets High Net Worth Taxpayers

It is no secret the US government needs more revenue to balance its budget. To narrow the gap, the Obama administration consistently has focused its revenue raising efforts on the richest among us. The Administration, among other ideas:

• proposed (unsuccessfully so far) to allow the Bush tax cuts to expire for families earning more than $250,000;
• proposed (unsuccessfully so far) to cap the benefit of itemized deductions for high income taxpayers to a 28% tax rate regardless of the taxpayer's actual marginal rate;
• enacted additional reporting obligations on taxpayers using non-US accounts and significant penalties for failing to comply; and
• paid for its landmark federal health reform law (at least in part) with a 3.8% tax on the investment income (interest, dividends, capital gains) of families earning more than $250,000.