Beginning in 2013, the national health care reform legislation that became law in March, 2010, imposes a new 3.8 percent tax on certain investment income. The new tax will apply to single filers with incomes over $200,000 and married taxpayers with incomes over $250,000.
Additionally, the modified adjusted gross income threshold at which this Medicare tax will apply will not be indexed for inflation, which means an increasing number of taxpayers will be snared by this tax provision.
That’s in addition to the 4.6 percent hike when the Bush tax cuts expire. America’s top tax rate would effectively be 43.4 percent, higher than most of the world. And it would apply to more and more Americans over time.
What do you suppose that will do to the economy in the long run? Or the short run?
The 3.8 percent Obamacare increase will kick in, no matter what. So, politically, it might be best to give Obama the rest of the increase, and let him and the voters suffer the consequences.