How Will Barack Obama Affect Your Life and Dental Practice?

There is a saying in the US Military: “We salute the rank, not the man.” Unlike the media (for example, the CNN pundit who called President Bush a “highly functional moron“), I still feel the office deserves a high level of respect… regardless of the man or woman who holds the position. So, if you’re looking for a series of Obama-bashing editorials, you aren’t going to find them here.

Truth be told, we just don’t know what our new president-elect is really all about. Plus, he is a politician. As a class, campaign promises and party positions are rarely translated verbatim into real legislation by politicians.

As dentists, you need to watch two areas: taxes and health care reform. Of the two, taxes will probably have a more direct impact on your life in the next four to eight years than national health care legislation.

It will take two to three years for health care legislation to be hashed out and a new government bureaucracy built to implement it. The lack of financial resources will initially limit it to physicians and medicine. Once again, be thankful you chose dentistry! You now make more than the average physician, and you will be free to continue to do so for the immediate future.

Taxes are another thing entirely. If president-elect Obama is true to his word and does not increase income taxes on those of us earning $250,000 or less, then all is well and fine. However, Obama will most likely allow the Bush tax cuts of 2001 and 2003 to lapse in 2010. Allowing the rates to return to higher levels is not technically a “tax increase.” It’s just the lapsing of a tax cut.

For the next tax issue, I would like to quote Ned Barnett of The American Thinker.

The next loophole involves the payroll tax that you pay to support the Social Security system. Currently, there is an inflation-adjusted cap, and according to the non-profit Tax Foundation, in 2006 — the most recent year for which tax data is available — only the first $94,700 of an unmarried individual’s earnings were subject to the 12.4 percent payroll tax. However, Senator Obama has proposed lifting that cap, adding an additional 12.4 percent tax on every dollar earned above that cap — and in spite of his promise, impacting all those who earn between $94,700 and $249,999.

Please note that the current FICA cap is $102,000 (versus $94,700 in 2006). The individual only pays half of this tax; the employer pays the other half.

This extension of the payroll tax could turn out to be the biggest bite you see coming out of your income in the coming years! However, remember that reality will most likely moderate this new graduated payroll tax system along the lines of the income tax tables.

Until next week…

Jim Du Molin

About Jim Du Molin

+Jim Du Molin is a leading Internet marketing expert for dentists in North America. He has helped hundreds of doctors make more money in their practices using his proven Internet marketing techniques.

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