Estate Planning

Presidential Candidates' Tax Proposals

By Gregory Herman-Giddens

The following is from the latest GiftLaw eNewsletter's Washington Hotline:

Presidential Candidate Barack Obama's Proposals

Middle Class Tax Cuts - The general goal of the Obama plan is to cut taxes for the middle class and raise taxes for higher-income persons. For individuals age 65 and over with incomes under $50,000, he proposes no income taxes.

Tax Rates - The personal tax rates for persons with $250,000 or more of income would be restored to the 1995 level of 39.6%. The corporate tax rate would remain at 35%.

Estate Tax Rate - The estate tax rate of 45% would be continued with the 2009 exemption of $3.5 million per person.

Capital Gains Tax - The probable capital gains tax rate will be 20% (various rates have been discussed).

Net Tax Cut - The overall plan is a net tax cut. The increased taxes on higher income persons will be offset by tax credits for lower income workers, increased college tax credits and increased childcare tax credits.

Sen. Obama stated, "I will cut taxes - cut taxes - for 95% of all working families. Because in an economy like this, the last thing we should do is raise taxes on the middle-class."


Presidential Candidate John McCain's Proposals

Tax Cuts - Sen. McCain proposes to continue the tax cuts of 2001 and 2003. The top rate will remain 35% for higher-income persons.

Increase Dependent Deduction - The dependent deduction would increase from the current $3,500 per child level to $7,000 by 2016.

Corporate Rate - The top tax rate on corporations would be reduced to 25%, with a broadening of the corporate tax base.

Alternative Minimum Tax - The AMT patch would be continued and indexed to exclude most Americans from AMT.

Estate Tax - The estate tax exemption would be increased to $5 million per person with a top estate tax rate of 15%.

McCain advisor Carly Fiorini has indicated, "John McCain has a consistent record of cutting taxes. As President, he will fight efforts to increase the current tax rates, and will require a 3/5 majority vote in Congress to raise future taxes."

 

Full post as published by North Carolina Estate Planning Blog on September 03, 2008 (boomark / email).