I want to thank everyone who participated in my recent (and highly unscientific) poll on the proper tax rate on $10 million. We had a total of 624 votes.
The answers were widely distributed but I calculated an estimated median tax rate of 33.53%.
Tax Rate |
Votes |
Percentage |
0% |
21 |
3.27% |
1% to 5% |
4 |
0.62% |
5% to 10% |
9 |
1.40% |
10% to 15% |
18 |
2.80% |
15% to 20% |
47 |
7.32% |
20% to 25% |
77 |
11.99% |
25% to 30% |
78 |
12.15% |
30% to 35% |
95 |
14.80% |
35% to 40% |
102 |
15.89% |
40% to 45% |
65 |
10.12% |
45% to 50% |
47 |
7.32% |
50% to 55% |
34 |
5.30% |
55% to 60% |
5 |
0.78% |
60% to 65% |
11 |
1.71% |
65% to 70% |
4 |
0.62% |
70% or more |
25 |
3.89% |
I’ve previously done similar polls for $25,000, $40,000, $100,000, $250,000 and $1 million.
Here are the results by estimated median vote:
$25,000: 2.66%
$40,000: 8.31%
$100,000: 16.33%
$250,000: 22.69%
$1,000,000: 28.23%
$10,000,000: 33.53%
Breaking out a little math, we can make a three-bracket tax code that links the data above. It looks like this:
The first $21,245 is tax-free.
$21,245 to $74,275 is taxed at 17.73%.
$74,275 to $671,715 is taxed at 26.93%.
Over $671,715 is taxed at 34.12%.
There are lots of ways to connect the data. We could add one more bracket at 10% and create a little more realistic code:
The first $18,350 is tax-free.
$18,350 to $28,410 is taxed at 10%.
$28,410 to $85,628 is taxed at 20%.
$85,628 to $85,628 is taxed at 27%.
Over $676,779 is taxed at 34.1%.
Posted by Eddy Elfenbein on November 5th, 2011 at 3:31 pm
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
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Eddy Elfenbein is a Washington, DC-based speaker, portfolio manager and editor of the blog Crossing Wall Street. His Buy List has beaten the S&P 500 by 102% over the last 17 years. (more)
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