Zack Danger Brown's potato salad fundraiser is still racking up the simoleons, and those ever diligent defenders of tax justice at the Tax Foundation have calculated exactly what he might owe in taxes when all is said and done:
As of 2:30pm on July 9, 2014, Zack Danger Brown has amassed over $70,000 in pledges from donors using Kickstarter—a website that matches donors to projects—to make potato salad.
Nearly 5,000 backers from across the world have chosen Brown’s potato salad project, and tens of thousands of dollars will be dished to Brown on August 2. But once these funds are given to Brown, they will constitute income that might mean a sizeable tax bill for Brown. Kickstarter explains how pledges are taxed:
“In the U.S., funds raised on Kickstarter are considered income… A creator can offset the income from their Kickstarter project with deductible expenses that are related to the project and accounted for in the same tax year. For example, if a creator receives $1,000 in funding and spends $1,000 on their project in the same tax year, then their expenses could fully offset their Kickstarter funding for federal income tax purposes.”
Kickstarter also notes creators “may be able to classify certain funds” as nontaxable gifts instead of income, so long as the funds were pledged with “detached and disinterested generosity,” but one look at Brown’s Kickstarter page shows that these funds probably won’t qualify.
After Kickstarter's cut and business expenses for donor rewards, the Tax Foundation figures Zack will be left with $65,912 pre-tax. Then, take out self employment taxes, progressive federal taxes, state and local taxes and Zack is left with an effective tax rate of 32.11 percent and $44,744.51 in his pocket (based on the current amount pledged toward this campaign as of 2:30pm today).
All in all, that's a $21,000 bill from Uncle Sam for some potato salad. Que unamericano!
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To trigger job growth, Gingrich proposed to cut the U.S. corporate tax rate from 35 percent to 12.5 percent, a deeper cut than some other Republican politicians have offered. He would extend income tax cuts that expire in 2013, which were the subject of a pitched battle late last year when President Barack Obama tried to let tax reductions for wealthier Americans expire. And he would completely eliminate the capital gains tax on stock profits. Gingrich, proposed that the country move toward an optional flat tax for Americans of 15 percent, and strengthen the dollar by returning to “Reagan-era monetary policies,” and reform the Federal Reserve to promote transparency. [