Obama vs. Romney Tax Plan Showdown

OBAMA VS ROMNEY TAX PLAN SHOWDOWN VS 2012 RESIDENTIA ELECTION Obama Tax Plan Current Tax Plan Romney Tax Plan INDIVIDUAL INCOME TAX RATES 10% 15% 25% 28% 36% 13% 39.6% 8% 12% 10% 15% 25% 28% 33% 35% 20% 20% 20% 22.4% 26.4% 28% 20% 20% 9% 20% 20% LONG TERM CAPITAL GAINS TAX RATES 10% 0% 0% 00% 15% & below tax bracket 33% 20% 15% 0% 100% 15% bracket to 200K (250K married) 59% 23.8% 15% 15% Over 200K (250K married) QUALIFIED DIVIDEND TAX RATES 0% 0% 0% 15% & below tax bracket 15% 15% 0% 100% 15% bracket to 200K (250K married) 36% 15% 15% 140% Current 33% bracket Over 200K 164% 39.6% (250K married) Current 35% bracket INTEREST INCOME TAX RATES 10% 15% 25% 28% 100% 10% 15% 25% 28% 0% 0% 0% 0% 100% 100% 100% 0% 100% 36% 33% 9% Under 200K 26.4% 20% Over 200K to next bracket 13% 39.6% 35% 28% 20% GIFT TAX AMOUNTS & RATES 45% 35% 35% 29% Tax amount above $13K in a year (26K married) or add amount to unified lifetime credit Tax amount over 13K Tax amount above $13K in a year (26K married) or add amount to unified in a year (26K married) or add amount to unified lifetime credit lifetime credit $3.5 M $5.13 M $5.13 M Unified Credit Amount Anything above is taxed at 45%. This increases taxes by lowering threshold Unified Lifetime Credit Amount. Anything above is taxed at 35% Unified Lifetime Credit Amount. Anything above is taxed at 35% ESTATE TAX/DEATH TAX RATES 45% 35% 0% 29% 100% Tax amount over 13K Tax amount above $13K Eliminate the Estate Tax in a year (26K married) or add amount to unified lifetime credit in a year (26K married) or add amount to unified lifetime credit TAXES $3.5 M $5.13 M $0M Unified Lifetime Credit Unified Credit Amount Anything above is taxed at 45%. This increases taxes by lowering threshold Unified Lifetime Credit Amount. Anything above is taxed at 35% would be removed with no estate tax rate CARRIED INTEREST TAX RATES Taxed at Option 1: Option 2: Tax at Income Rate Dividend Rate Tax as Dividends* Tax at Income Rate* 10% 15% 25% 87% 28% 0% 15% 15% 15% 0% 0% 100% 0% 100% 100% 22.4% 149% 8% 12% 20% 00% 00% 20% 67% 20% 0% 0% 100% 36% 15% 26.4% 76% Under 200K 140% 15% Over 200K 164% 39.6% 15% 15% 28% 87% Romney did not define which option he will use as of 10/10/12 CORPORATE TAX RATES 20% 28% 35% 25% 29% ALTERNATIVE MINIMUM TAX CHANGES Extra tax some people must pay. Current rules keep it and adjust for inflation ?% 0% 100% Plans to permanently adjust AMT for inflation. Also plans on implementing a minimum effective tax rate of 30% to Romney plans on eliminating the AMT all together people making $1+ million a year (Buffet Tax) TAX DEDUCTION CHANGES Itemized Tax Deductions. Current rules allow many for all income levels ?% ?% Plans to possibly cap itemized deductions at 28% for wealthy families. Medical expenses that exceed 10% of AGI are deductible (still 7.5% for those 65 or older) Romney plans to eliminate or limit many of the itemized deductions available to upper income taxpayers. It remains to be seen what these limits actually are REVENUE PROJECTIONS FROM TAX PLANS Increase Revenues Neutral According to the White House budget, Obama plan will increase annual tax revenues Romney claims that his plan will be revenue neutral. He claims that the tax cuts will be offset by limiting tax deductions, closing loopholes, & creating economic growth. BROUGHT TO YOU BY: Sources: http://www.mittromney.com/issues/tax http://www.barackobama.com/taxes/ http://www.bankrate.com/finance/taxes/tax-proposals-obama-vs-romney.aspx http://money.cnn.com/2012/02/22/news/economy/romney_taxes/index htm?id=EL http://abcnews.go.com/Politics/OTUSstax-realities-romney-obama-fiscal-cliff/story?id=17379665# http://money.cnn.com/2012/09/07/news/economy/tax-obama-romney/index. html http://taxes.about.com/od/payroll/a/Medicare-Tax.htm http://www.reuters.com/article/2012/02/07/us-usa-tax-obama-budget-idUSTRE8161Z20120207 BackTaxesHelp.com Text, design and images 2012 Back Taxes Help LLC, except for third-party trademarks and images, which are the property of their respective owners Free to reproduce. Please link to original page or www.backtaxeshelp.com when reproducing. ATH