How would Obama's tax proposals impact Utah families?

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SALT LAKE CITY -- Financial advisers in Utah are weighing in on President Obama's proposals to extend current tax laws and to lower the Social Security payroll tax temporarily. They say Utahns will definitely be able to notice the impact if the proposals are adopted.

The compromise, reached between White House officials from the treasury department and members of both political parties, would extend the Bush tax cuts for wealthy people for another two years. Plus, it would lower the Social Security payroll tax by 2 percent.

Keith Prescott with Wisan, Smith, Racker and Prescott says that's the change the average taxpayer would feel first. It essentially equates to 2 percent of a worker's gross pay coming back to them.

"There are some exceptions to that -- contributions to certain plans and that sort of thing, but it would be pretty much 2 percent of gross pay," Prescott said.

The Wall Street Journal says someone earning $70,000 a year would be able to keep an additional $1,400. This will only last for one year. But, Gygi Capital Management President Gary Gygi says it could be good for the overall economy.

"If [taxpayers are] able to spend some of that money that they get to keep, that in turn should help boost the economy," he explained.

Of course, there is some debate about that. Other economists cited by the Wall Street Journal say this cut is too small to really stimulate the economy. Another change proposed in this compromise would affect the estate tax. Everything below $5 million is exempt.

"If you were to pass away this year, then your estate tax would have been zero. Next year it would have bumped back up to 55 percent. So, there was compromise made to where the rate is now 35 percent," Gygi said. He says both parties had to make some concessions regarding this tax.

E-mail: pnelson@ksl.com