Obama, taxes and the mid-level associate

February 27, 2008

Legal scholar Ted Frank, a regular contributor to Overlawyered.com and Above the Law, says “BigLaw lawyers love Obama.”

They might not love him - or Frank - quite as much after reading Frank’s Tuesday post, where he lays out what Obama’s proposed tax policies (including ending the Bush tax cuts and the social security tax cap) will do to BigLaw wallets.

To illustrate his point, Frank calculates the effect of the tax changes on a mid-level BigLaw associate who is paid market value at a New York City firm. After he lists out his assumptions (she is single, maxes out her 401k, gives $10K/year to charity), he reveals the verdict:

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.

Frank acknowledges, “Now, money isn’t everything. A BigLaw associate, who is already handsomely paid, might find it worthwhile to take the equivalent of a $34,000/year paycut to have Barack Obama as president instead of John McCain.”

But he also points out, “If you’re willing to reject a law firm over a few thousand dollars, how much money would sway your presidential vote and campaign contributions?”

Click here to download Frank’s excel spreadsheet, which you can edit with your own information. (Note: it will only work for taxable income above $78,850).

What do you think?

JACKIE SAUTER, Web Editor

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Posted by The Daily Record | Filed Under law, politics, salaries 

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