If you earn >250K

[Anonymous]

Anonymous wrote:AMT kills all of this discussion and affects most people down to $200K or so.

Agreed - we pay AMT every year - having bought our home in the early 90's before the boom, our mortgage interest isn't much of a break. Mixed blessing I guess.

Big thing is if they put FICA taxes on all your income. Anyone who earns 100K knows that once they hit that magic number ever year (fall for me) their pay check goes up until the new year starts. One BO proposal is to eliminate the wage cap on FICA, which would cost our household about 5% of what we pay in income taxes.

[Anonymous]

There are three major possible tax issues for high earners. Obama's economic advisers lay these out in a recent WSJ op-ed here:

http://online.wsj.com/article/SB121867201724238901.html?mod=opinion_main_commentaries

They include rollbacks of Bush's tax cuts, an increase in the capital gains tax and dividend taxes, and an increase in payroll tax for those earning over $250K. Obama proposes a tax cut for 81.3% of all households, or 95% of working families with children (assuming an income of under $250K). The tax cut would be $500 for workers and $1,000 for working couples. The Tax Policy Center estimates that 32% of households with a person over 65 would also see a tax increase under Obama's plan. I am unclear on whether that means 32% of all households with a person over 65 earn over $250K. Surely that can't be true?

Here is the Tax Policy Center's analysis of Obama's plan:

http://www.taxpolicycenter.org/numbers/displayatab.cfm?Docid=1968&DocTypeID=2

For those who would like to do their own comparisons, here's a link to TPC's analysis of the McCain proposal:

http://www.taxpolicycenter.org/numbers/Content/PDF/T08-0182.pdf

The Tax Policy Center is a non-partisan project of the Urban Institute and Brookings Institution.