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.
Seems that whenever there’s a “fair share” in need of paying, the only ones expected to pony up are the very people already funding the lives of those who are never asked to. And Democrat politicians like Obama posture as modern-day Robin Hoods — though perversely, they steal from the private citizen to give to the tax collectors and government flunkies, who whet their own beaks before allowing some of that money to be redistributed. In return, they receive praise and adulation and the votes of the increasingly dependent.
— And all without having ever to risk taking an arrow out of their quiver and pointing it at an official of the State. That is, with no real skin in the game.
Nice work if you can get it.
Taxation has been described as the art of plucking the goose for the maximum amount of feathers and the minimum amount of hissing.
The Obamarrhoids have addressed the latter with earplugs. Somebody should remind them that geese also bite.
I’ve forgotten the details, but when Clinton was president there was some sort of reform enacted with regards to Medicare prescription payment that also involved an income threshold after which the receipient had to pony up and not get their meds for “free”.
The local paper, naturally, ran a feature about Mr. and Mrs. Kindly who made just a teensy bit over the threshold and were to be *gasp* denied coverage! The feature was accompanied by photos of kindly old Mr. Kindly at the kitchen table with his raft of meds and Mrs. Kindly fretting about what they would do.
Deep in the body of the article it was mentioned that the kindly old Kindly’s had many children who were quite successful and who lived in the area. Never was the issue of the Kindly’s kinder kicking in on the folks meds mentioned. Instead, the government was cast as E-vil and heartless and leaving the Kindly’s to die.
Nothin’ ever changes.
I’ve been thinking about this a lot {having to pay for all of our own meds out of pocket}
I have two nieces with cystic fibrosis. The daily meds that keep them alive are incredibly expensive and our family (all of us combined) could never hope to make enough money to cover the costs. Right now they are covered by medicaid.
The CF foundation is coming up with some breakthroughs for genetic treatment of the disease,(with no government support – CF patients and their families footed the bill for all of the research) which would extend their lives to possibly normal lengths. The cost? $300k/yr for 1 patient.
So I’m willing to try to buy my family their meds to keep them alive (since they are 2 little girls with their whole lives ahead of them) – but I realize sadly that I could never have any hope of doing so.
MissFixit, imagine if you could bill your homeowner’s insurance for replacing a burned-out light bulb.
How much would that light bulb cost?
I think I see what you mean. I wonder if that applies here? The drug company supplying the new CF drugs have stated that it will cost $300k/year for those making more than $150k/year. Anyone who makes less than that (and isn’t covered under insurance?) will get the drugs for free. It sounded to me like the company was offering to give these drugs away as a humanitarian gesture, since the patients themselves footed the bill for this recent breakthrough.
I think this would break the back of Medicaid, to be funding a drug this expensive for all the CF patients. (Maybe 30,000 patients total in the US or North America – I have to check figures again)
What revenue they do get for the drug subsidizes everybody else that gets it. In my analogy, the light bulb manufacturers would give free light bulbs to the uninsured, as a PR thing — but you with your homeowner’s insurance would pay enough for the bulbs you get, to cover the cost of the free ones.
The mistake isn’t that the uninsured are getting free light bulbs, or that the insured are paying for those free light bulbs as well as their own. The mistake is that insurance is covering the light bulbs, which has created a distorted market that is ultimately unsustainable.
It’s mind-boggling that nobody seems to be using the phrase “health insurance bubble” — because we’re in one, and ObamaCare is only inflating it further.
I get that, thanks for the explanation. I figured since CF is considered a rare (“orphan”) disease, it is massively more expensive to produce those kinds of drugs (versus producing aspirin). I was thinking in terms of supply and demand.
my dad is paying $800 out of pocket for health insurance until he can get on Medicare. $800/mo! It’s more than his house payment! He’s living off his savings and it’s not going to last much longer.
The health insurance bubble, like the college tuition bubble, can’t pop fast enough. The longer this goes on the more pain and suffering for everyone.
Yep. And the “education cost bubble” is another one. Cheaper student loans aren’t the solution, they are the problem.
Note to self: read all the way to the end before commenting.