New York is the Tax Capital of The World according to the Wall Street Journal which said:
"In New York, Assembly Speaker (and de facto Governor) Sheldon Silver and other Democrats will impose a two percentage point "millionaire tax" on New Yorkers who earn more than $200,000 a year ($300,000 for couples). This will lift the top state tax rate to 8.97% and the New York City rate to 12.62%. Since capital gains and dividends are taxed as ordinary income, New York will impose the nation's highest taxes on investment income -- at a time when Wall Street is in jeopardy of losing its status as the world's financial capital".
Add this to the inevitable federal tax increase and the tax burden on successful attorneys (who presumably make greater than $200,000 per year) is rapidly becoming confiscatory.
Will tax rates stay high? What can you do today? Structure your attorney fees.
By structuring your attorney fees and pushing receipt of income into the future there is the possibility that the eventual receipt of income could occur at a time when we are at the ebb of the deficit cycle and the top tax rate is lower.
Quick Tips on Structured Attorney Fees
- Plan to structure your attorney fees by making sure that your retainer agreement is in order. The form of your business entity may require additional preparation.
- Consider that some liability insurers refuse to structure attorney fees. It therefore makes sense to discuss your pending cases with a settlement planner early in the year so that you can strategize accordingly. Don't wait until the day before that big case settles!
- Attorneys can stabilize cash flow and build up a sizable retirement income portfolio by layering multiple structured attorney fee annuity contracts. Even a small structured attorney fee annuity now can make a difference down the road.