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Response to Bucky (Original post)

Mon Apr 13, 2015, 11:19 PM

35. Obama raised taxes on the wealthy (top 2 brackets). When did any Repug do that?

Kick and Rec on very important OP (bizarrely strange it only got 5 recs)

Back to taxes. First, on ordinary income ... Obama raised the top tax bracket marginal rate from 35% (under Bush) back to 39.6% that it was under Clinton. He also added a 0.9% Medicare surcharge on the top 2 brackets; bringing the total top marginal rate to 39.6 + 0.9 = 40.5%.

On unearned income (other than long term capital gains), there's a 3.8% Net Investment Income Tax (NIIT) on the top 2 brackets, bringing the total top marginal rate to 39.6 + 3.8 = 43.4% (again it was 35% under Bush)

On long term capital gains, the top bracket is 20% + the 3.8% NIIT tax bringing it to a total of 23.8%. It was 15% under Bush. So the move from a 15% tax rate to a 23.8% tax rate is a 59% increase (23.8/15.0 = 1.59)

(Other conditions apply on when and how the NIIT tax is imposed, so the above is somewhat simplified)


More Details:

The 39.6% tax bracket begins at $413,200 Single/ $464,850 MJF Taxable Income in 2015. 39.6% is the marginal rate that these people pay on ORDINARY income above these limits. Ordinary income includes things like salaries, but not long term capital gains.

You can see the tax rate tables by searching for "2015 Tax Rate Schedules" at http://www.irs.gov/publications/p505/ch02.html

People with Taxable Income above these limits pay the nominal 20% capital gains tax rate on their long term capital gains (http://www.irs.gov/taxtopics/tc409.html ). Plus the 3.8% NIIT surcharge for a total of a 23.8% rate on their capital gains.

The above changes (except for the 0.9% Medicare surcharge and the 3.8% NIIT surcharge) were the result of The American Taxpayer Relief Act of 2012. http://www.taxpolicycenter.org/taxtopics/American-Taxpayer-Relief-Act.cfm

To help pay for the Affordable Care Act, a "Net Investment Income Tax (NIIT)" 3.8% surcharge was added to: the lesser of: net investment income, or Modified Adjusted Gross Income amounts that exceed $200,000 Single / $250,000 Married Filing Jointly. Itís a bit confusing, but on studying, it clearly applies to people making several hundred thousand dollars or more in capital gains, even if they have no ordinary income. FFI: http://www.irs.gov/uac/Newsroom/Net-Investment-Income-Tax-FAQs

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Bucky Apr 2015 OP
Bucky Apr 2015 #1
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LineReply Obama raised taxes on the wealthy (top 2 brackets). When did any Repug do that?
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