Taxes will be going up … thanks to ObamaCare and Justice Roberts.
Flashback: ObamaCare’s initial $1 trillion cost projections (which have already doubled) … were funded (on paper, that is) roughly half by cuts to Medicare and half by tax increases.
One of the tax increases is a 3.8% tax on investment income … essentially slapping payroll taxes on so-called “unearned income”.
“Unearned income” is more than dividends and capital gains.
The tax applies to:
- interest, except municipal-bond interest;
- short- and long-term capital gains;
- the taxable portion of annuity payments;
- income from the sale of a principal home;
- a net gain from the sale of a second home;
- passive income from real estate and investments, such as limited partnerships.
The tax does not apply to:
- payouts from a regular or Roth IRA, 401(k) plan or pension;
- Social Security income; or annuities that are part of a retirement plan.
- life-insurance proceeds;
- municipal-bond interest;
- veterans’ benefits; Schedule C income from businesses
Also, the tax does not apply to non-resident aliens.
Couple of mega-takeaways:
1) Municipal bonds benefit … not subject to the ObamaCare surcharge … and don’t count towards the $250k AGI trigger.
2) Renters lose … landlords are likely to pass along the surcharge to higher rents
3) Housing prices pressured … double-whammy … higher cap gains taxes make houses less attractive as investments … rents tax decreases motivation for investors to buy and rent homes.
4) Seniors lose … if they shifted their retirement portfolios to fixed incomes … since interest and dividends get hit … dividends especially since they’ll also get hit with an increase in income tax rates — from 15% to as high as 39.5%
At least our health insurance premiums are going down … NOT !Could be worse … our health insurance premiums could be going up … oops, they are.
Oh well …