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Treasury Minting New Gold Coin

September 18, 1986|DEBRA WHITEFIELD

QUESTION: Do you know whether it is true that the U.S. government is working on a new gold coin? And if it is true, what will it sell for?

D. B.

ANSWER: For the first time in 53 years, there is indeed a new gold coin in the making at the Treasury Department. It bears the image of Lady Liberty on one side and the American Eagle on the other and is due to go on sale Oct. 20. It will be available in four denominations: $5, $10, $25 and $50.

But don't get the idea that you will be able to pay $50 for a $50 legal tender gold coin weighing one ounce. The coins will be priced according to the going market rate for gold. Plus, there will be a small fee for handling the sale. So, if gold is still going for about $400 an ounce come Oct. 20, you would have to pay $400 for one of the new $50 gold coins, plus a premium of $10 or $15.

Q: In last week's column you mentioned that someone earning $42,000 a year would pay about 9.7% less in taxes in 1987 than in 1986 if the tax-reform bill becomes law and about 9.1% less than 1986 taxes the following year. I hadn't seen such calculations before. Do you have the figures for all income groups?--R. D.

A: As the compromise bill by the Joint Committee on Taxation is written, here is how taxpayers in various income groups can expect to fare in 1987 and 1988.

For 1987, taxpayers with annual incomes of less than $10,000 would pay 55.2% less in taxes than they will for the 1986 tax year. For incomes of $10,000 to $20,000, the tax liability would decline 16.4%. In the $20,000-to-$30,000 income range, the decrease is 10.7%; $30,000 to $40,000, a 9.4% drop; $40,000 to $50,000, a 9.7% decline, and $50,000-to-$75,000, a drop of less than 1%.

Above $75,000, incomes would be more heavily taxed as a rule beginning next year. Taxpayers in the $75,000-to-$100,000 bracket could expect to pay 5.2% more; those earning $100,000 to $200,000 would pay 5.6% more, and those with incomes of $200,000 or more would be taxed at a rate that is 11.4% more than now.

Those tax liability changes reflect the proposed change from 11 individual tax brackets to two: 15% and 28%. This two-rate tax structure would take effect in the middle of next year. So, for 1987, filers of joint returns would be taxed at 11% if their incomes are less than $3,000; 15% for incomes of $3,000 to $28,000; 28% for those earning $28,000 to $45,000; 35% for incomes of $45,000 to $90,000, and 38.5% for incomes above $90,000.

Even in 1988, the first full year of the two-rate structure, not all taxpayers will pay taxes at either a 15% or 28% rate. High-income taxpayers--defined as couples with joint taxable incomes of $71,900 or more--will be taxed, on average, at an effective rate of 33%.

Every income class would get a tax rate cut in 1988. The percentage decreases break down this way: 65.7% for those earning less than $10,000; 22.3% in the $10,000-to-$20,000 income class; 9.8% for incomes of $20,000 to $30,000; 7.7% for $30,000-to-$40,000 incomes; 9.1% in the $40,000-to-$50,000 bracket; 1.7% for incomes between $50,000 and $75,000; 1% in the $75,000-to-$100,000 income class, 2.4% for incomes of $100,000 to $200,000, and 2.3% for taxpayers with taxable incomes of at least $200,000.

Overall, the tax cuts amount to 1.6% for 1987 and 6.1% for 1988.

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