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.
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.
Unless President Obama and Congress take action soon, Taxmageddon will hit on January 1, 2013. Taxmageddon is a $494 billion tax increase for 2013 alone. It is made up of several expiring tax policies and the implementation of new Obamacare tax increases that all kick in at the start of next year.
Taxmageddon includes a rise in the capital gains tax from 15 percent to 20 percent, in addition to the 3.8 percent from Obamacare, which brings the capital gains tax rate to 23.8 percent, a 59 percent increase as of New Year’s Day.
In addition, beginning in 2013, Obamacare imposes a 2.3 percent excise tax on the sale of commonly used medical equipment. This tax has the potential to significantly affect employment and medical innovation. Device manufacturers will either pass on the tax as higher costs to consumers or absorb it themselves. If they pay the costs themselves, they will likely have to recoup this cost by decreasing labor costs.
And nothing is taxed twice...the money you have made on an investment has not had taxes paid on it yet.
Originally posted by FlyersFan
Obamacare robbed medicare. Seriously dug into it.
Will there even be any medicare left to 'double tax'??
Obamacare Robs 716$ Billion from Medicare
We earn income.
We then pay tax on that income.
We then either consume our after-tax income, or we save and invest it.
If we consume our after-tax income, the government largely leaves us alone.
If we save and invest our after-tax income, a single dollar of income can be taxed as many as four different times.