Barack Obama Presidency and Your Investments
There has been some speculation lately about what kinds of stocks would benefit under either a Barack Obama administration or a John McCain administration. Now that question is getting closer to being answered. However, it is also important to look at other effects that a Barack Obama presidency might have on your investments. And by that, I mean taxes.
CNN Money has great coverage of the main points of the Barack Obama economic policy. While we’ll still have to wait to see what actually happens and what is sacrificed to political expediency or to reality, it is probably a fairly safe bet that proposed taxes on investments will go through. The country needs the revenue.
Taxes on investments
There are two main taxes on investments that will likely be seen in a Barack Obama presidency:
- Tax on carried interest. Right now, tax on carried interest is seen as an investment for tax purposes. This could change under Obama. Instead, this carried interest would be taxed as income, automatically subjecting it to a higher tax than the 15% rate that exists on investments.
- Raise the capital gains and dividend tax rates. While #1 is unlikely to affect much beyond hedge funds and private equity, capital gains and dividends may affect retirement savings. However, the rate is to be raised to 20% from the current 15%, and only on couples making more than $250,000 and singles making more than $200,000. So if you make less, little is likely to change in terms of your retirement account.
Your retirement investments
Of course, your retirement account is made up of investments. Obama wants to provide a match on retirement savings for families that earn less than $75,000 a year. It’s a nice thought, but this is probably something that falls by the wayside, since funding it will be tough.
As always, though, it is up to you to do what you can to make the most of any situation. No matter who is president, you bear ulitmate responsibility for your decisions — and the success they bring you.
