Tuesday, February 26, 2008

BARACK OBAMA

Ye Gods, That's a Tax Hike!

AboveTheLaw takes a look at Obama's two signature tax proposals - the repeal of the Bush tax cuts, and raising the limit on Social Security taxes from the first $102,000 to every penny you make. (A few commenters note that Obama hasn't promised that, merely indicated he's open to the idea, and has also mentioned, but not committed to, a "doughnut hole" that would not raise SS taxes on certain income levels.)

Net effect? For a well-to-do lawyer ($280,000 in salary and bonus), take-home pay drops almost $20,000 for the year, from $182,775 to $163,252. It drops $515 per paycheck.

Over at the Standard, Michael Goldfarb jokes "How does this effect me, you ask? Because I know one day the boss will see my true value to this company and offer me that $160k salary."

Yes, but remember that couples' income is considered one big fat target for most tax purposes, so two modest incomes (particularly in areas with high costs of living) become "rich" in the eyes of the tax code quite quickly. The Social Security cap rising wouldn't change for those making less than $102,000 individually, but the repeal of the Bush tax cuts would affect folks with income well below $160k.

02/26 04:40 PMShare