Taxpayer asks:
My wife and I make a combined annual income in the ballpark of $270-280K/year. We work hard, and are saving for a home in order to start a family. I need someone to explain something to me …. I understand that Barak Obama’s proposed tax plan uses the $250K mark as the line separating the middle class from the ‘rich’ … but I am trying desperately to find a grid that can show me how much of an increase in taxes that my wife and I can expect. Does anyone know a good website that can help me apply this proposed tax information to my actual income figures? Thanks in advance.
Taxgirl says:
There are some really good resources out there that can help you understand what both candidates propose.
For one, I highly recommend going to the source – the candidates. Many web sites will politicize the plans – so why not read the actual plans first? Click here for the McCain plan and here for the Obama plan.
My quick summaries of the tax plans can be found here.
If you’re looking for a side by side comparison, Deloitte put out a great one – I’ve published it here on my site. It’s a one page chart showing the results of proposals at differing income levels and differing familial situations. You’ll find a link to the WSJ article with further details in the comments – there’s also a link to another blog with some good stuff.
I’ve also posted some information from the nonpartisan Tax Policy Center. The full reports from the Tax Policy Center, along with the links, are available at that post.
I hope that points you in the right direction!
Before you go: be sure to read my disclaimer. Remember, I’m a lawyer and we love disclaimers.
If you have a question, here’s how to Ask The Taxgirl.
I always find it interesting these plans the candidates for offices like President and Governor put out. Seldom are they passed, the legislatures are the ones that pass the laws. While the president or governor do get to influence such things, they can only veto. They cannot pass great changes all by themselves.
Another thing to consider is how much would McCain’s health plan cost you? Payroll tax on health insurance, fewer people with health care, thus more people needing medicare or going bankrupt from health care costs, utlimately is likely to result in more taxes (or gov’t debt).
Also, if income is just over 250k — is that your total income or your taxable income? Deductions before baby dropped our income (and thus taxable rate) by about 20k and about 25k after baby.
And, if 270 to 280k range is your taxable income, that takes us back to McCain’s health care proposal to tax your payroll healthcare costs, which could up your taxable income even farther.
I will put everyone’s uncertainty to rest regarding Obama’s tax cut proposal. Regardless of your income, you will most certainly see a tax increase under Obama. There may be relief for the lowest of income earners but that will probably be for people making next to nothing who pay next to nothing in tax (easy to cut someones income tax when they don’t really pay any to begin with since the cost to the government is low).
To think that Obama will give tax cuts to any one else is laughable. Bill clinton promised middle class income tax cuts when he ran, and raised taxes for everyone instead. He even started taxing social security income. He did this at a time when the economy was rebounding and ended up with tax gains to the treasury due to his hike in taxes and the increased revenue that the economy was generating. That is why he claimed to have a budget surplus when he ran for re-election (what he didn’t tell you was that they had to add in social security taxes collected but not paid out to retirees to the general budget to show a surplus).
Democrats are not in the business of giving tax cuts. They have pledged all kinds of new social programs and growth among current entitlement programs. That is how they get people to vote for them.
As a country, we can’t even afford Social security or medicare in its current form. If we add universal health care and a bad economy to the list, there is no way that Obama is going to lower taxes. NO WAY! He will try and fund his new spending with tax increases on virtually everyone and many of the tax increases he will impose on business will, soon there after, trickle down to the consumer so we will see increases in goods and services as well.
Take this to the bank because if Obama wins, you won’t have anything else to take to the bank.