Under Obamacare, Medicare Double Taxation Begins in 2013


By Matt Cover

August 20, 2012
(CNSNews.com) -A provision of President Obama’s health care  law imposes a second Medicare tax on investment income for Americans  classified as wealthy, effectively raising taxes on investment income  and taxing investors twice.

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

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