The answer is that Obama’s tax increases have a bigger effect on your income than a law firm cutting New York salaries by $34,000.
That is, for lawyers making some $280,000 or more before the tax increases become effective. Here’s Ted Frank explaining at AboveTheLaw.com/legal tabloid.
BigLaw lawyers love Obama. If one searches by law firm various databases on-line for campaign contributions, one sees an overwhelming sea of blue, and most of it to Obama.
But how will Obama affect BigLaw wallets? On Above the Law, we regularly see commenters threaten to abandon law firms for falling $5,000/year short of market. I therefore thought it worthwhile to examine the effects of Obama’s tax and spending plans on take-home pay.
We all know that Obama wants to end the Bush tax cuts. That is a 3% bump across the board to the bad old days when associates faced a marginal federal tax rate of 36%.
But the real hidden tax is that Obama plans to end the social-security tax cap. Right now, you may notice, sometime during the summer or early fall, your take-home pay suddenly goes up because they stop deducting FICA. Current law caps social security taxes: in 2008, the cap is at $102,000. Obama proposes to abolish this. That mid-summer bump will be no more: add about several thousand dollars to your annual tax bill.
But social-security taxes are not only on employees. The government also charges 6.2% to employers that you never see on your W-2s. But rest assured the partners see this, and will notice that the expense of keeping an associate has risen several thousand dollars a year when FICA taxes double and triple. Will they swallow that additional expense, or take it out of your bonus?
Ted provides a spreadsheet so you can calculate what these policies will cost you personally.
I rather liked this comment:
I come from a blue collar immigrant family so I was not born with a silver spoon in my mouth and worked very hard to get to where I am today. This is exactly why I WON’T be voting for the Democratic nominee for president in Nov. Why exactly should I be funding the rest of the country’s po-dunk citizens who can’t get their act together? The majority of the money that I earn should go into my pocket not some welfare mother with 15 children. Flame away I don’t care. The truth hurts. Deal with it.
Can you hear it? I bet you can’t — it’s the world’s smallest violin playing just for members of this minority group (those making more than 250 K per annum, who constitute 2% of the American population and the 5% who earn more than 102 K). Regarding the abolishment of the social security tax cap: why shouldn’t members of this minority group pay the same social security taxes as everyone else, what entitles you and your minority group pals to such a cap?
As for the quote you admire: I give you the benefit of the doubt that you recognize there are far more people who make less than 280 or 102 K that have worked their asses off and who do have their “act together” , for instance: software developers, paralegals, social workers, prison guards, teachers, etc, etc, etc.
That said, I do respect your post since you’ve abstained from use of the meaningless and clichéd ‘socialist’ epithet.