einar writes:
"New Jersey's governor Christie has decided that all new motor vehicles must be sold through middlemen. This blocks Tesla from directly selling cars, without traditional car sellers. Although, New Jersey decided so this week, they are in good company: 48 states in the US ban or restrict direct car sales."
(Score: 2, Interesting) by tftp on Friday March 14 2014, @08:44PM
Most people don't get into those situations because the income tax on earnings is marginal, such as the higher tax rate is applied only to the amount above a certain value. However there are many other taxes, and I remember encountering such a situation before. The most obvious example is the difference between long term and short term capital gains. It is absolutely essential to know when securities were bought before you sell them because you may lose money on a profitable sale. There are other catches, like this one [irs.gov]:
These numbers may look high, but imagine that you were building up a business, saving every penny, living on Ramen noodles for twenty years... and one day you sold your company for $5M. Guess what, you will get a haircut as if you were earning $5M for every year out of those ten. It's very difficult to sell an expensive object (a business, a building, or land) and not be hit by sky-high taxes as if you are Bill Gates.
So generally it's complicated. Nobody knows all of the Tax Code. I do not do my taxes, I outsource it to people who know what they are doing, and I listen to their advice. Here is a great story [wordpress.com] that everyone must read. Sweden at that time was famous for taxes with gradient of +infinity.