How can the reduction in marginal tax rates (from 28% to 27%, for instance) become effective on 7/1/01? Does this mean that anything I have earned over $45,200 (married, filing jointly) before 7/1 will be taxed at 28% and after 7/1 will be taxed at 27%? Or is it on a prorated basis, with half of my year's income being taxed with a marginal rate of 28% above $22,600 (half of the above threshhold) and half my income being taxed with a marginal rate of 27% above $22,600. Depending on which way it is handled, I may or may not have any money in the 28% bracket, but could fall entirely within the new 27% bracket.This is one of those cases where you can make some of the people happy all the time, all of the people happy some of the time, but not all of the people happy all of the time.This is a compromise. The refund checks that are forthcoming will attempt to make up for some of the inequities of the tax tables. When you file your taxes, you'll adjust your refund by the advance payment IRS will make late this summer. If IRS over pays you, you'll be one of the few lucky one who will NOT have to repay the government for their miscalculation. How fortunate for some.One of things I wonder about is if someone moves, neglects to file a change of address with IRS, and for some reason his rebate check does not reach him, but IRS records show he was mailed a check.....Just wondering if this will be a problem for some.
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