Despite all of the bad tax/budget news surrounding the Obama administration there is some good news. Current tax proposals that are part of the 2011 budget increase the 28% taxable income bracket from $210,000 to $230,000 for married individuals and from $170,000 to $190,000 for Single filers. This is very good news and a cause for celebration. The bad news is that this tax reduction comes at a cost. There will be an increase in the top tax rate on capital gains and dividends from 15% to 20% for this same group of taxpayers. There will also be a cutback on itemized deductions and personal exemptions for these filers. For those in the 36% and higher tax brackets, itemized deductions will be allowed, however, they will be capped at a 28% tax rate (for deduction purpose) For example,  if your $100 itemized deduction previously reduced your income tax by $36, in Obama's 2011 Budget, it would only reduce your income tax by $28.

The Hope Tax Credit for college expenses is currently capped at a credit of $1,800. Under Obama's tax proposals, this credit will be replaced by a larger $2,500 tax credit per student, which covers four years, not just two years.

Business Tax Proposals:

• Businesses would be required to change from the LIFO inventory valuation method to the FIFO methods. This will increase taxable income, as FIFO uses old costs in valuing inventory;
• Investment fund managers will now be taxed at ordinary income tax rates on any share of profits they are contractually entitled to;
• Obama wants landlords to issue 1099s to service providers such as plumbers or painters;
• Businesses would have to issue corporations 1099s on payments over $600;
• Employee leasing firms will be held solely liable for unpaid payroll taxes