Obama Tax Proposals

Obama Tax Proposals

By by Martin M. Shenkman, CPA, MBA, JD

President Obama’s Latest Tax the Rich Proposal President Obama will release his 2013 budget proposal on February 13 and it is expected to be consistent with prior recommendations he has put forth. There is a clear objective of making the wealthy pay a “fairer” share of taxes. While passage of anything before the election is doubtful, taxpayers should be on their toes in case these proposals foreshadow actual future changes:

  • The Buffett Rule may be added to prior proposals to assure that any taxpayer earning more than $1 million will pay at least at a rate of 30%. Tax shelters may be back in vogue!
  • Bush-era tax cuts for all but the wealthy will likely be extended instead of being allowed to expire on December 31, 2012. One possibility lets the top tax rates increase from 33% and 35% to their pre-Bush levels of 36% and 39.6%. Tax exempt bonds will get a boost!
  • Obama opposes eliminating the estate tax, but for the past three years he has pushed to keep it at a more generous level than would be the case under current law, where it would revert to a $1 million exemption level and a top rate of 55%. Instead the president would like to raise the exemption level to $3.5 or even $5 million and lower the top rate to 35% and make portability permanent. Plan now, while you can! We’ve been saying this since December 2010 – act now.
  • Limit itemized deductions for high-income households. Under President Obama's proposal, the wealthy would only be allowed to claim deductions for a 28% tax benefit, much lower than the highest tax bracket. This could change charitable giving and a host of other common planning techniques.

Our Consumer Webcasts and Blogs

Subscribe to our email list to receive information on consumer webcasts and blogs, for practical legal information in simple English, delivered to your inbox. For more professional driven information, please visit Shenkman Law to subscribe.

Ad Space