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On January 20th Barack Obama will become the 44th President of the United States. As a right leaning political observer, it would come natural to me to write a critical article about the new Obama Administration and their policies. Today, however, I decided to take Obama’s own stated policies and plans and attempt to breakdown how they may affect our personal finances. While the economy and macro economics are certainly interesting to discuss, this article will focus on the individual economy of a typical American family. These are all policy positions taken directly from the Obama website or from public statements made by President Elect Obama.
Obama On Taxes
Individuals earning under $250,000 will not face a tax increase, but those earning over $250,000 will.
Examples: From the Obama website
|
WHO |
TAX CUT |
|
Married Couple Making $75,000 with two children, one of whom is in college |
$3,700 |
|
Married Couple making $90,000 |
$1,000 |
|
Single Parent making $40,000 with two young children and childcare expenses. |
$2,100 |
|
70-Year Old Widow Making $35,000 |
$1,900 |
There are also some more vague discussions on tax policy. This includes the promise to provide some modest tax benefits to small business owners and to simplify the tax code (“millions of Americans will be able to do their own taxes in less than five minutes without an accountant”).
Obama On The Mortgage Crisis
There appears to be a very big philosophical shift on how to deal with the present mortgage/foreclosure crisis. The Bush Administration provided billions of dollars directly to financial institutions with the hope that they would in turn use some of these funds to help people in trouble with their mortgages. That help has not trickled down to the average American. It appears that some direct assistance for troubled homeowners may be available soon. From my own review of a variety of comments by President Elect Obama, it appears that he is much more inclined to work directly with homeowners than to simply trust this to happen as a result of flooding the banks with money. An Obama administration is likely to direct future bailout money more directly toward Main Street instead of Wall Street. You will see from the video below that Obama favors a moratorium on foreclosures and a plan to allow ‘responsible homeowners’ to refinance.
Obama On Credit Cards
“Many more Americans aren’t falling into debt because they made an irresponsible decision; they’re falling into debt because credit card companies are pushing them over the edge. For too long, credit card companies have been using unfair and deceptive practices to trick Americans into signing agreements they can’t afford. The contracts you sign when you get a card have gone from being one page-long a few decades ago to more than thirty pages-long today. And they’re often filled with traps and fine print that only a credit card executive could understand. These companies have been crossing the line to boost their bottom line.”
I can not agree more with Obama on this one, let’s see if he really does anything here. The credit card and financial lobby in Washington has an incredible amount of influence.
Obama On The Estate Tax
There is little doubt that Obama and the Democrats will move quickly to repeal the 2010 planned elimination of the estate tax. This is a top priority and may happen within weeks of Obama taking office. The plan is to provide a 3.5 million dollar exemption from estate taxes for individuals and a 7 million dollar exemption for married couples. Amounts above the exemption will be taxed at 45%.
Obama On Health Care
I am personally very excited about the prospect of some changes in our health care system. I hear from too many people that can not find affordable health insurance, or can not get any coverage due to pre-existing medical issues. There is also the problem of health insurance being tied to employment, which makes changing jobs or starting a small business very difficult. Many people are trapped in a dead end job because they can not afford to lose their health insurance.
Among Obama’s health care reforms include computerizing all medical records within five years, require insurance companies to cover pre-existing conditions, a tax credit for small businesses to make health insurance more affordable, reduce costs by making the health insurance marketplace more competitive.
Final Thoughts
We predict a massive expansion in government construction work, which will be fantastic for those in the construction trades. We also believe that Americans will see higher energy prices under an Obama Administration, due to his lack of support for offshore drilling and exploration in ANWR. Before you get too excited, keep in mind that for now this is all campaign rhetoric. It should also not be forgotten that we are in a major recession and there may simply not be enough money for many of these plans to be implemented. We should all be especially concerned that any substantial increase in taxes on the so-called rich may have significant negative consequences which could deepen the current recession further.
James L. Paris Editor-In-Chief www.ChristianMoney.com
Guaranteed Isuue Health Insurance for people with pre-existing conditions, who have been denied health insurance coverage. This plan is HIPAA Compliant. Please contact me for more information at
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Posted by: Donna Hirsch | January 14, 2009 at 12:36 PM
If I put my boy's college money into a coverdale education account, can they take that money if I have to file for bankrupcy?
Posted by: David Aurand | January 19, 2009 at 02:17 AM