By Matt Cover
The provision, a little-known part of ObamaCare, levies a 3.8 percent Medicare tax on investment income for couples making more than $250,000 or individuals making more than $200,000 a year. The tax is scheduled to go into effect on January 1, 2013.
Currently, the government levies a 2.9 percent Medicare payroll tax on all wages, with half (1.45%) paid by the individual and half by the employer.
Beginning in 2013, couples making more than $250,000 (or individuals making $200,000) will have to pay an additional 3.8 percent Medicare tax on any investment income (unearned income) they might have.
In other words, beginning in 2013, wealthy Americans who have investment income will be taxed twice to pay for Medicare – once on their regular salary and again on their investment income.
This new Medicare tax will be in addition to the taxes investors already pay on their investment returns – known as capital gains taxes – effectively raising capital gains taxes by 3.8 percent.
The new tax was part of Democrats’ attempt to make Obamacare appear deficit-neutral, and it will add $318 billion to federal coffers between 2013 and 2022, according to a July CBO analysis.
The tax applies to traditional investment income derived from dividends, real estate investments, interest, or profits from trading financial products such as stocks and bonds.
The tax effectively raises the total tax on capital gains to 23.8 percent on long-term investments and to 43.4 percent for short-term investment gains, interest, and rental income.
Tax rates on all types of investment income are set to rise in 2013 when the Bush tax rates expire. Currently, long-term capital gains are tax at 15 percent, while short-term gains, interest, and rental incomes are taxed at 35 percent. Those rates are set to rise to 20 and 39.6 percent, respectively, when the Bush tax rates expire at the end of 2012.
The ObamaCare Medicare investment tax would increase those rates by 3.8 percent.
According to the Heritage Foundation, five of Obamacare’s 18 new taxes begin in 2013, and they would raise $23 billion for the year.
Categories: Bible Prophecy, Breaking News
"If My people who are called by My name will humble themselves, and pray and seek My face, and turn from their wicked ways, then I will hear from heaven, and will forgive their sin and heal their land." 2 Chronicles 7:14 God's call to the world! Are you ready?