President Obama’s tax plan is set to increase the tax bill for the wealthy, but it could end up hurting many middle class citizens living in richer areas of the United States. Many people living in the $200,000 to $400,000 per year income range live in high-cost areas of New York or California and are stretched to afford their homes when real estate prices were higher. These people certainly are not rich, but they are worried that the president’s plan could push them over the edge.

The reality is that many of these people are already subject to higher taxes because they are paying the alternative minimum tax. Even with the new tax hikes, the amount of taxes these people owe may not change that much because what they owe under the regular income tax may not push them out of the alternative minimum tax territory. But higher income people in states with lower income or property taxes are more likely to pay bigger sums.

The other big concern for investors is the capital gains tax rate, which would change depending on income. People in the top two tax brackets would see their capital gains tax rise to 20 percent from 15 percent while middle income families would still pay the same amount. This may deter many people from investing in the stock market as the price has gotten much higher…