President Elect Obama and Taxation
During the recent Presidential Election we heard a great deal about taxes and
what would happen under an Obama administration. In reality, most of us will be able to
increase our savings and hopefully reach for our piece of the American Dream!
What the plan really is
We heard a lot during the election cycle about who would pay additional taxes and the
possible devastating effect on small businesses. However, those who are in fact small
business owners are not very likely to notice a marked increase in their tax liabilities,
in fact, chances are they'll have a lower tax burden than they have today.
How did that happen?
President Elect Barack Obama has promised tax relief for middle class families
and promises to not raise taxes on those who are making less than $200,000 for single
taxpayers and $250,000 for married taxpayers. He's also committed to the growth of small
business and will offer tax incentives that encourage small businesses to thrive in this
Two of the most important offerings for small businesses are offered in the economy
package that is outlined by President Elect Barack Obama which includes:
- Tax Relief - As a small business owner you find yourself the victim of double
taxation which can prevent you from hiring new employees. Obama and Biden propose to
eliminate all capital gains taxes on start-up and small businesses to encourage innovation
and job creation within small businesses.
- Business Incubators - Similar to venture capital business incubators help small
Overall the Obama and Biden plan should encourage growth of small businesses which in
turn should help stimulate the economy.
You might be wondering what the net effect of all of this is - in fact, being able to grow
small business in today's economy means that more people will have jobs, more money will be
put into new purchases (stimulation) and fewer people will be facing the loss of their homes.
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Taxing and Individual Savings
We all understand that the rising cost of gasoline, heating oil, electricity and more means
that we have fewer dollars to make our everyday obligations such as our mortgage payments and
medical payments. Because of this fewer of us are able to save and we're spending far more
than we were just a few months ago. But offering families new tax incentives for our mortgage,
health care we will all find ourselves able to save even more than ever before. Where we are
facing higher heating costs we will be able to get a tax incentive for heating, where we're
facing higher prices at the gas pumps, we'll see tax incentives to purchase more energy efficient
cars. The more money that we can save the less likely we are to face the devastation of losing our
home to foreclosure in the event that we lose our jobs.
Can it work?
In today's economy, nothing is guaranteed - no one can guarantee that you will have a job
tomorrow or that your savings is going to double in 5 years or that you'll be able to
get that loan for a brand new home. Working within the constraints of a new administration that
is facing an economic crisis of monumental proportions immediate steps must be taken to
stimulate growth in jobs. Whether it works or not will remain to be seen but the steps laid
out by Obama and Biden do seem to be steps in the right direction.
See also: Obama and The Bailout Bill