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Obama Vs. The Successful
27 Feb 2008 01:28 pm
Obama's appeal to the upper middle classes is powerful. But it remains a fact that the impact of an Obama presidency would be very tough for anyone earning over $160,000 a year. Removing the cap on the payroll tax, in particular, will clobber the successful:
Betsy’s marginal tax rate goes up from an already ridiculous 42.5% to 51.4%—not including the new 6.2% marginal tax on your employer. Subject to how she structures her withholding, Betsy’s take home pay drops an average of $515 a paycheck—less in the early months of the year, but much more in the later months of the year. Add in the effects on her bonus, and Betsy loses nearly $20,000/year in take-home pay.
I added a third column: how big a pay cut would you have to take to receive the same take-home income? The answer is that Obama’s tax increases have a bigger effect on your income than a law firm cutting New York salaries by $34,000.
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