After exploring the proposals of both President Obama and Governor Romney, this article provides an overview of what each candidate is proposing. Keep in mind, the most important thing is to remember – no matter who wins the White House, without a willing Congress, the successful candidate’s proposal will depend on his ability (or inability) to work with Congress. So, as you prepare to vote today, know that these are only PROPOSALS!
President Obama’s Tax Proposal
Obama’s tax proposal aims at tax increases for higher income individuals, which is known as the “Buffet Rule.” The key platform of President Obama’s plan is to extend the Bush tax cuts for low to moderate income individuals, while increasing high income individuals’ tax rates for those earning $200,000 ($250,000 for married filing jointly). This plan would increase the top tax brackets from 33% to 36% and 35% to 39.6%.
Obama also proposes the following:
● Long term capital gains at tax rates of 0%, 15%, and 20% for low, moderate and high income individuals respectively;
● Qualified Dividends taxed at 0% and 15% for low and moderate income taxpayers respectively;
● Lifetime exemption of $3.5 million for estate taxes with a top rate of 45%; and
● Limited itemized deductions for high income taxpayers.
Governor Romney’s Tax Proposal
Contrast this with Governor Romney’s plan which proposes to reduce income tax rates across the board with the highest tax rate expected to be 28%. Additionally, Romney proposes the following:
● Both long-term capital gains and qualified dividends taxed at 0% for low to moderate income taxpayers and 15% for higher income individuals; and
● A repeal of both the estate and alternative minimum tax.
Now keep in mind, Romney also proposes certain deductions will be eliminated.
Happy voting today! And remember, your vote is crucial not only during the presidential election, but every single election! A successful president definitely depends on who is also elected to Congress!
Remember: your choice, your future!
James Washington is a certified public accountant and a tax attorney. Follow him on Twitter.