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Thu Nov 29, 2012, 12:05 PM

42%?

Just got into a discussion with a financial advisor about top income tax rates. He mentioned Obamacare actually pushes the top rate to 42% instead of the Clinton era top rate which l believe was 39.6%. He said he heard it on CNBC. Anyone know of this? Is this true?

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Response to SHRED (Original post)

Thu Nov 29, 2012, 12:06 PM

1. Do not invest with that financial advisor. nt

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Response to SHRED (Original post)

Thu Nov 29, 2012, 12:07 PM

2. No, I don't, but if it was from a pundit, I'd wonder about it. They don't fact check!

However, 42% marginal tax rate would translate down in practice. For instance, during the 92% marginal taxation days, that translated to about 54% effective tax rate.

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Response to SHRED (Original post)

Thu Nov 29, 2012, 12:09 PM

3. sort of -- the affordable care act added a 3.8% medicare tax on unearned income.

if your adjusted gross income is over $200,000 ($250,000 married filing jointly)

it's also 0.9% on earned income.

so if you're in the top bracket due solely to earned income, the rate would be 40.5%.
but if 100% of your income were unearned (dividends, interest, etc.) the rate would be 43.4%.
actual mix would be somewhere in-between, so it could be 42% if the mix is right.

http://www.bbdcpa.com/articles/tax-provisions-in-new-patient-protection-and-affordable-care-act/

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Response to SHRED (Original post)

Thu Nov 29, 2012, 12:11 PM

4. CNBC = 'Comedy, Not Business, Channel'. Run as fast as you can from that

 

supposed financial advisor. What a shill and a loser.

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