HomeLatest ThreadsGreatest ThreadsForums & GroupsMy SubscriptionsMy Posts
DU Home » Latest Threads » Forums & Groups » Main » General Discussion (Forum) » President Obama has alrea...

Wed Mar 14, 2012, 04:39 PM

President Obama has already signed a law raising taxes on top earners by $210 billion.

Little known fact, I know. But the healthcare reform bill included a tax increase on the top bracket of wage earners from 35% to 39.6%. It also imposes Medicare taxes on individuals making over $200k or families making over $250k, and capital gains taxes to 20% from 15%. Those two moves alone raise taxes on top earners by $210 billion dollars. And that's over 6 years, not over 10 years the way the CBO usually calculates it's numbers.

http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#Summary_of_funding

If 39.6% tax on top earners sounds familiar, it should: 39.6% was the top tax bracket circa 2000, before the two rounds of Bush tax cuts.

8 replies, 1540 views

Reply to this thread

Back to top Alert abuse

Always highlight: 10 newest replies | Replies posted after I mark a forum
Replies to this discussion thread
Arrow 8 replies Author Time Post
Reply President Obama has already signed a law raising taxes on top earners by $210 billion. (Original post)
TheWraith Mar 2012 OP
marlakay Mar 2012 #1
Ziggystrange Mar 2012 #2
TheWraith Mar 2012 #4
Ziggystrange Mar 2012 #5
TheWraith Mar 2012 #6
Ziggystrange Mar 2012 #8
dmallind Mar 2012 #7
Nuclear Unicorn Mar 2012 #3

Response to TheWraith (Original post)

Wed Mar 14, 2012, 04:41 PM

1. Now we know the REAL reason they wanted to scrap it

not all the bs they have been saying...

Reply to this post

Back to top Alert abuse Link here Permalink


Response to TheWraith (Original post)

Wed Mar 14, 2012, 04:46 PM

2. Where?

 



"Summary of tax increases:

Broaden Medicare tax base for high-income taxpayers: $210.2 billion
Annual fee on health insurance providers: $60 billion
40% excise tax on health coverage in excess of $10,200/$27,500: $32 billion
Impose annual fee on manufacturers and importers of branded drugs: $27 billion
Impose 2.3% excise tax on manufacturers and importers of certain medical devices: $20 billion
Raise 7.5% Adjusted Gross Income floor on medical expenses deduction to 10%: $15.2 billion
Limit contributions to flexible spending arrangements in cafeteria plans to $2,500: $13 billion
All other revenue sources: $14.9 billion
Original budget estimates included a provision to require information reporting on payments to corporations, which had been projected to raise $17 billion, but the provision was repealed.
"
http://en.wikipedia.org/wiki/Patient_Protection_and_Affordable_Care_Act#Summary_of_funding

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Ziggystrange (Reply #2)

Wed Mar 14, 2012, 04:50 PM

4. Line item 1: "Broaden Medicare tax base for high-income taxpayers: $210.2 billion"

That covers both extension of Medicare taxes and the additional surcharge for top earners.

Wiki doesn't mention the timeframe I'm afraid, but you can go to the source noted in the references and find out that it's over 6 years rather than annually or over 10 years.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to TheWraith (Reply #4)

Wed Mar 14, 2012, 05:04 PM

5. Please read this.

 

"The Congressional Budget Office (CBO) also initially stated that the bill would "substantially reduce the growth of Medicare's payment rates for most services; impose an excise tax on insurance plans with relatively high premiums; and make various other changes to the federal tax code, Medicare, Medicaid, and other programs;" A commonly heard criticism of the CBO cost estimates is that CBO was required to exclude from its initial estimates the effects of likely "doc fix" legislation that would increase Medicare payments by more than $200 billion from 2010 to 2019; however, the "doc fix" remains a separate piece of legislation.. Subject to the same exclusion, the CBO initially estimated the federal government's share of the cost during the first decade at $940 billion, $923 billion of which takes place during the final six years (20142019) when the spending kicks in; with revenue exceeding spending during these six years."



According to the above the 200 billion tax increase is on "Medicare, Medicaid, and other programs" not income tax.
The math doesn't add up. A return to Clinton era taxes would yield trillions.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to Ziggystrange (Reply #5)

Wed Mar 14, 2012, 05:11 PM

6. The math adds up.

I'm not sure how you read that as a tax increase on Medicare and Medicaid. The $200 billion referred to in that paragraph is outlays, not revenue, having to do with payment rates to doctors. It's unrelated to healthcare reform except that it's about Medicare payments, and therefore slightly affected by the payment rate changes in the HCR bill.

As far as "trillions," the Bush tax cuts involved a lot more than just the top income tax bracket. It was disproportionally tilted that direction in terms of benefits, but due to the population numbers the small benefits to most of the public still amounted to many hundreds of billions of dollars. Also remember that those Bush tax cut numbers are usually calculated over 10 years, not 6.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to TheWraith (Reply #6)

Wed Mar 14, 2012, 05:35 PM

8. Ok I'm just trying to understand where your numbers came from

 

Summary of funding

The Act's provisions are intended to be funded by a variety of taxes and offsets. Major sources of new revenue include a much-broadened Medicare tax on incomes over $200,000 and $250,000, for individual and joint filers respectively, an annual fee on insurance providers, and a 40% tax on "Cadillac" insurance policies. There are also taxes on pharmaceuticals, high-cost diagnostic equipment, and a 10% federal sales tax on indoor tanning services. Offsets are from intended cost savings such as improved fairness in the Medicare Advantage program relative to traditional Medicare.

Summary of tax increases:

Broaden Medicare tax base for high-income taxpayers: $210.2 billion (NOT A TAX INCREASE ON INCOME)
Annual fee on health insurance providers: $60 billion
40% excise tax on health coverage in excess of $10,200/$27,500: $32 billion
Impose annual fee on manufacturers and importers of branded drugs: $27 billion
Impose 2.3% excise tax on manufacturers and importers of certain medical devices: $20 billion
Raise 7.5% Adjusted Gross Income floor on medical expenses deduction to 10%: $15.2 billion
Limit contributions to flexible spending arrangements in cafeteria plans to $2,500: $13 billion
All other revenue sources: $14.9 billion
Original budget estimates included a provision to require information reporting on payments to corporations, which had been projected to raise $17 billion, but the provision was repealed.
=========================================================================================
http://www.nytimes.com/2011/09/18/us/politics/obama-tax-plan-would-ask-more-of-millionaires.html?pagewanted=all

There is no change to the income tax rate

"The marginal tax rate is the percentage paid on the last dollar a person earns. The current system has six marginal tax rate percentages 10, 15, 25, 28, 33 and 35 and each applies to a progressively higher amount of income. In theory, a wealthy filer pays the lower rates on income within each bracket, but the bulk of their income is taxed at the top 35 percent rate. Middle-class taxpayers generally pay marginal rates of 15 percent or 25 percent. "

The top marginal tax rate stands at 35%.

Tax Bracket Capital Gain Tax Rate by tax bracket.
Short Term Long Term
10% 10% 0%
15% 15%
25% 25% 15%
28% 28%
33% 33%
35% 35%


I see 35, and 15, not 39.6 and 20.

If you can explain it I will be very happy.




Reply to this post

Back to top Alert abuse Link here Permalink


Response to Ziggystrange (Reply #5)

Wed Mar 14, 2012, 05:27 PM

7. not really.

Total income is about 12T.

The top 1% get 20% of it, and pretty much that's the group that pays the highest marginal rate (over 370k or so). Now assuming ALL their income is at that rate, which is an exaggeration, we'd have 2.4T. but we only raised the rate 4.6% which gives us a max of 110B a year, but that's before any deductions at all, and again assuming all income is subject to the highest rate.

Reply to this post

Back to top Alert abuse Link here Permalink


Response to TheWraith (Original post)

Wed Mar 14, 2012, 04:48 PM

3. Hooray! We're saved!

Reply to this post

Back to top Alert abuse Link here Permalink

Reply to this thread