How will Obama presidency affect your taxes?

November 5, 2008 3:54:44 PM PST
Now that Barack Obama is the president-elect, there could be changes ahead in the tax code. After all, Mr. Obama's tax plan played a huge role in the election, so when can you expect to see the tax laws changed? It was one of the central issues in the campaign and it even made a household name out of an Ohio plumber. So just how long will it take for people to see the Obama tax cuts?

President-elect Obama's acceptance speech is still in headlines, but the transition to an Obama White House is already underway. One issue looming large for voters is when can they can expect to see the promised Obama tax changes?

"He has been talking about change for all this time and I expect him to hit the road running and get off and start making changes as fast as he can," said voter Mary Beth Russell.

"I think there is probably a lot of research that would have to be done before they come up with what is best and how it will work out," added voter Frederick Marc-Charles.

In fact, any changes to the tax law will not come quickly. John Diamond is a tax policy expert at Rice University.

"A lot of times, it takes a while for tax plans to get through Congress," he said.

That's because of the process involved in passing legislation. The details of the Obama tax plan will have to be written into a bill by members of the House of Representatives. After it's debated, the tax bill will go to the Senate for more debate before then-President Obama can sign it into law.

"For Bush, when he came in in '01, it took him almost until May before they actually got something passed and he had an all Republican House and Senate, so I would think it would be fairly similar for Obama," said Diamond.

The details of the plan will determine how much debate is generated in Congress, and there can be quite a few details to work out.

"Even the $250,0000, is that gross income? Is that after all the deductions? It is unclear as to how you would apply the higher tax rates," said Houston CPA Bob Martin.

There are tax calculators available on the Internet that can estimate your projected tax cut, but until the details are passed into law, those projections could end up changing.

Experts we spoke with say voters can expect a lot of debate on Capitol Hill before the tax plan becomes tax law, so get ready for months of news coverage on this issue.

Meantime, Barack Obama's website had a calculator if you'd like to get a general idea of your tax burden under his plan. Click here to access it.

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