Insurance Money and Senior Investment Income Under an Obama Administration

It’s difficult to estimate the effects an Obama presidency will have on insurance benefitsy (including annuities) and senior investment income. On the one hand, Obama has proposed eliminating income tax altogether on “the elderly” making less than $50,000. Also, both John McCain and Obama have been competing for the middle class – and thus, BOTH candidates have proposed significant tax cuts for people making $100,000 to $200,000 income a year.

According to the non-partisan Tax Policy Center, a two-earner family with six kids making $150,000 a year will get a $6,500 per year reduction in taxes under McCain’s plan and a $7,500 reduction under Obama’s.

Yet despite Obama’s claim that he will “cut taxes for 95% of the American people,” many experts believe he will end up presiding over the largest tax INCREASE in history on ordinary Americans. Here’s why.

First, Obama and his fellow Democrats will allow ALL of the Bush era tax cuts to expire – which will result in automatic tax INCREASES for most people .

Second, according to the authoritative “Preliminary Analysis of the 2008 Presidential Candidates’ Tax Plans,” published by the Brookings Institution/Urban Institute’s Tax Policy Center, Obama’s published plan would actually result in an INCREASE of 13% in taxes on families earning $31,000 to $45,000 a year. The reason why is because Obama increases the tax credits to families but makes them “refundable,” meaning they push families into higher tax brackets.

Third, Obama’s definition of “rich” is not $250,000 a year, as he claimed during the campaign, but actually $110,000 a year. His policies would result in a staggering 45% effective marginal rate for families in the $110,000 to $120,000 income range – an increase of 11% over current law .

Fourth, according to the non-partisan Tax Policy Center, the Obama plan would reduce taxes for low- and moderate-income families, but “raise them significantly for high-bracket taxpayers.” The institute estimates that even “middle-income taxpayers would see their after-tax income RISE by about 5% over the next four years.”

Fifth, Obama plans on increasing the amount of income subject to Social Security and Medicare taxes from the current threshold of $00,000 annually to NO LIMIT.

Sixth, Obama will nearly DOUBLE the capital gains tax, such as on sales of homes, from the current 15% to 28%.

Seventh, if Obama does not significantly alter or eliminate the dreaded Alternative Minimum Tax (AMT), his “tax cuts for the middle class” will instantly go up in smoke.

Finally, the great unmentioned factor in all of this discussion is the global economy. Both McCain’s and Obama’s projections for their tax proposals have been based on the Congressional Budget Office’s projections for the future based on the recent economy. However, if the U.S. goes into a significant recession, even depression, the tax revenues will plummet – and Obama will need to make enormous tax increases just to maintain current levels of government spending.

Our advice: Retire now and relocate to a tax haven outside the U.S. while you still can. With control of BOTH houses of Congress and a filibuster-proof majority in the Senate, liberal Democrats will have TOTAL CONTROL of the U.S. government for the first time since the 1930s.