It’s that time again. The 2012 Presidential election is fast approaching and who America chooses will affect your personal finances. Barack Obama and Mitt Romney differ on a number of different issues that will affect your financial future, so your finances may be vastly different a few years from now depending on who gets elected. Will you vote based on which candidate will give your finances the biggest direct boost, even if you don’t feel that their economic policies are good for the country long term?
Yes, I’m Talking About Taxes
Taxes are a hot topic for the election this year. The debate is fierce on the United States’ need to increase income taxes, decrease spending or use a combination of both to reduce our national debt. Obama sides more with increasing taxes on higher income individuals coupled with more spending to spur growth, while Romney wants to decrease taxes and spending to accomplish the same goals.
Romney promises to cut marginal tax rates by 20% across the board if he is elected. He also plans to eliminate dividends and capital gains taxes for most American taxpayers. Obviously, the wealthier part of the population will benefit the most, but everyone will directly benefit if tax cuts are made. Some say this plan sounds too good to be true and given its vagueness, it may be. Only time will tell, assuming he is even given the chance to carry out his promises.
Obama, on the other hand, has a very different tax plan. Those making over $200,000 as an individual and joint filers making more than $250,000 will see their marginal income tax rate raised from 35% to 39.4%. In other words, he would like to expire the Bush tax cuts for these high income households. Under his vision, capital gains and dividend tax rates will also go back to pre Bush-era rates, but with the additional health care reform investment tax added on top. Essentially he wants to raise the burden on those earning the most. He promised that the middle class will not see any tax increases, but many analyses show this to be highly improbable.
Jobs Matter These Days
Unemployment has become an issue in the United States. Currently standing at 8.3%, the next President will need to make efforts to create more jobs for the American people. If you or someone you know is part of the 8.3% frantically trying to find a job, this has a significant impact on you.
Romney promises to add 12 million jobs in his first term as president. He says this will be accomplished by helping small businesses with lower taxes, improved schools and making the nation more energy independent.
Obama is highlighting his track record to show he is capable of creating jobs and lowering unemployment. His administration reports that 4.5 million jobs were created in the past 29 months. His main plan is to increase the importance of exporting over importing, doubling exports by 2015.
How are You Affected?
These are just two of many economic topics that could affect you when you head to the polls in November. Other issues, such as social security and medicare, may be affected as well. Though both candidates have yet to make specific claims on how they plan to tackle the major entitlement programs, the clock is ticking on the need for serious reform. What happens to the new health care plan is also important. Romney indicated that he would repel the health care act as soon as he steps into the Oval Office, while there would obviously be no changes under Obama.
David’s Note: The stakes are high to pick the right candidate on both the national and personal level. Which candidate would seem to benefit your own finances more? Which candidate do you believe is better for the country? If the answer to both questions are different, which would you choose?