Wednesday, December 17, 2008

What Will Obama Do With Capital Gains Taxes?

Dow Jones Newswire reports that President-elect Obama's plans include:

Exempting seniors earning less than $50,000 from income tax.

Increase the top two marginal tax rates from their current levels of 33 percent and 35 percent to 36 percent and 39.6 percent, respectively. Based on 2009 income thresholds, that would result in a tax increase on singles making $171,550 or more and married couples making $208,850 or more.

Taxpayers in those brackets also face increased taxes because President-elect Obama plans to restore phase-outs of personal exemptions and itemized deductions. This means that high-earners would not only face higher tax rates, but they would also lose some or all of their personal exemptions and itemized deductions.

Obama has also proposed raising the tax rate on capital gains income from 15 percent to 20 percent for single taxpayers making more than $200,000 and for married couples earning more than $250,000 annually.

Of course, nothing is set in stone yet and some of these issues may not be addressed until well into his term, depending on the economy.

We can be sure, however, that at some point the government will have to be paid back for all the billions or trillions of dollars it is spending to stabilize our financial infrastructure.

This will most likely be done through tax increases, so minimizing taxes becomes more important than ever. I’m glad my practice will benefit throughout the foreseeable future!

Paula Straub

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