Tuesday, April 06, 2010

Read My Lips

In 2011, income tax rates for the highest earners will go to 39.6 percent, up from 35 percent, and the capital gains tax will rise to 20 percent from 15 percent, unless Congress acts. The increases aren’t likely to be overturned by Congress, said Chuck Marr, director of federal tax policy at the Washington- based Center on Budget and Policy Priorities.

The capital gains tax will rise to 23.8 percent in 2013, to help pay for health-care reform signed by President Barack Obama March 23. That’s because the legislation applies a 3.8 percent Medicare tax on unearned income such as realized capital gains, dividends, interest, rents and royalties. The health-care bill also increases the employee’s share of the Medicare payroll tax levied on wages by 0.9 percentage points to 2.35 percent in 2013.

Both increases related to the health-care legislation will apply to about 1 million individuals who earn more than $200,000 annually and about 4 million couples who file jointly and make more than $250,000.

-From an excellent article by Margaret Collins and Alexis Leondis from Bloomberg News in Business Week. Its worth reading the whole thing.

Note, however, the last sentence of the second paragraph of the quote. The increase in the "employee's share of the Medicare payroll tax" applies to all employees, and not just individuals who make more than $200,000. Somebody call Joe the Plumber.

No comments: