The Presidential election campaign, mercifully, finally, thankfully, at last is coming to a close. Next Tuesday, the votes will be tallied (many have already been cast) and we’ll know who our next President will be.

Currently, Sen. Barack Obama leads in the polls. The candidates are duking it out in the last days almost exclusively in red states. That means Sen. Obama’s opponent, Sen. John McCain, is playing defense as the closing bell approaches.

What will happen once the dust settles? For this post, let’s assume a victory by Sen. Obama. Here are 7 things you can expect from an Obama Presidency and what they would mean for your wallet. We’ll come back later in the week with 5 things to expect from a McCain administration.

1. A new income tax plan. President Obama will begin work immediately on his tax proposals. On the trail, he’s talked about just raising the taxes of the “rich,” or families making more than $250,000 and individuals making more than $200,000. Since about 40% of low-wage earners pay no income tax, to make his pledge to cut taxes for 95% of working Americans, he will institute a tax-credit plan to help those not currently paying income taxes.
2. Investment taxes up. President Obama is also expected to increase the tax on capital gains and qualified dividends, currently at 15%. He’s whittled this proposed increase down from 28% to 20%. Of course, with the stock market behaving the way it is, there might not be a lot of capital gains to tax.
3. Payroll taxes up. The Obama administration plans to increase payroll taxes for those in the rich club, while leaving the cap on payroll taxes in place for everyone else. Payroll taxes fund Social Security. The current cap, indexed to wage growth in the economy, is $102,000. Both employees and employers pay taxes on income up to that level. The basic cap rules haven’t been changed since 1983. Don’t be surprised if this discussion “evolves” in the early days of an Obama administration.
4. Lower health care costs. President Obama would like to develop subsidies that will help offset health-care costs and make access to existing programs, like Medicaid, easier. He would also require coverage of children.
5. Stock market rally. This will happen when the election is over. Relief at the campaign finally being done will prompt an uptick in stocks, but don’t expect that relief rally to last until inauguration day. It might not last to the ides of November.
6. Trade questions. On the trail, Sen. Obama has displayed a mild protectionist streak. He says he wants to renegotiate the North American Free Trade Agreement and is skeptical of other free trade pacts, such as one with Colombia. If he follows through on these ideas, it could negatively affect economic growth and could also undercut profit performance of multinational companies. There is chatter that a President Obama would not alter existing trade pacts, despite what he has said, but will take a tougher line on future agreements.
7. The X Factor. There is some skepticism that a President Obama can fund his various plans, such as expanding health care, shoring up Social Security and expanding retirement-related benefits with his current tax promises. There are lots of goodies being proffered on the campaign trail, as is usually the case. It’s not like Sen. McCain is playing the miser, either. If Obama skeptics are accurate, that could mean one of three things: government spending cuts (riiiight), more and different taxes (tempting) or an even huger deficit than we already have (there’s a bold prediction). With Democrats expected to cement control of Congress, possibly with a filibuster-proof Senate, a President Obama will find many willing partners to devise ways to fund his plans.

-- Dave Kansas

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