Obama’s Dirty Little Tax Secret: He’s Already Raised Taxes on the Rich (CHART)
Curtis DubayDecember 6, 2012 at 4:27 pm(5)

The one glaring omission in President Obama’s fiscal cliff demands for higher rates on top earners is that he’s already raised their taxes. That’s right! When he signed Obamacare into law, he raised tax rates on families earning more than $250,000—his definition of rich.
He has done so by including in the 18 separate Obamacare tax hikes an increase of the tax rates on income and investment.
Obamacare raises the hospital insurance (HI) portion of the payroll tax on wage income over $250,000 from 2.9 percent to 3.8 percent. And it applies that 3.8 percent rate to investment income—capital gains and dividends—for those with incomes above that level. This is a massive policy change, since it represents the first time the payroll tax will apply to investment income. And even though this investment income HI tax would apply only to top earners, it is a dangerous step down a slippery, tax-hiking slope.
These economically damaging tax hikes will go into effect on January 1, 2013. When they do, the economy will suffer, because incentives to work and invest will fall. Less work and investment will mean that businesses create fewer jobs and pay their existing workers less than they otherwise would have.
Obama’s plan to raise rates further by allowing the Bush-era tax policies to expire for the same taxpayers he already hit with his Obamacare tax rate hikes would only exacerbate the economic damage.
Obama is fond of arguing that his plan for taxing the rich would just be going back to the rates we had under President Clinton. That is flat out incorrect. He again forgets that he signed Obamacare into law.
When factoring in the Medicare tax, the top income tax rate under President Clinton was 42.5 percent. Because of the HI tax increase in Obamacare, it would be 43.4 percent next year—but part of it will be hidden in the Medicare payroll tax.
The disparity between the Clinton rates and Obama rates would be even greater on investment. If Obama gets his way, the rate on capital gains would go to 23.8 percent when adding in the Obamacare surtax. The rate was 20 percent under Clinton. For dividends, the rate almost triples from 15 percent this year to 43.4 percent next year. Under Clinton, the dividends rate was 39.6 percent. (continues below chart)

In total, President Obama’s tax rate increases on upper-income earners in Obamacare will raise taxes by almost $318 billion over the next 10 years. But apparently that isn’t enough to satisfy the President’s ravenous appetite for even more revenue extracted from the small businesses and investors that help create the jobs the country desperately needs right now.
Beware the President’s demands for another round of tax increases on high-income earners, whether through higher rates or limiting deductions, exemptions, and credits. The hunger for higher taxes will never be satisfied, nor will it ever do anything to stop our impending debt crisis.
Posted in Entitlements, Taxes & Spending, Featured
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Curtis Dubay

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Tags: fiscal cliff, hospital insurance tax, income tax, investment, jobs, Medicare tax, Obamacare, payroll tax, President Clinton, small business, tax hikes, tax increases, Tax Rates, taxes
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Comments (5)
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Seth · 1 day ago
Awesome!
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+2
chopper120p · 1 day ago
The American takers elected him.........................now the American makers get to sustain him......

Stop paying your taxes................send not one cent to the deceiving despot in DC.

eff him and his ilk. Cash up front is how i'll be operating mylife. No credit, no taxes, no capital gains.

Cash or precious metals is the way to go.

No change, No hope, No reciepts, no returns, and no guaruntees.

except maybe a forehead stamp of approval.............................via Smith & Wesson.
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Tom Kulaga · 1 day ago
How about the cost to all the middle income people with Cadillac health insurance plans? For example many hospital employees HAD Cadillac Health insurance plans until the end of this month. My daughter, a nurse at Gennessee County hospital near Flint Michigan will need to pay $600 per month to keep her existing plan or take a lesser plan (80-20 bla bla bla).
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Moeys · 1 day ago
You can't possibly reduce the debt by taxing the so-called rich. Believe me $250,000 is not lap of luxury rich. The higher income earners are going to have a hard time keeping their companies afloat and we are going to see more massive layoffs for reasons ranging from higher taxes to the repressive nature of Obamacare. It is a very bleak outlook!
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Bill Pound · 1 day ago
OK, so these are the prospects for those earning more than $250,000. What about the rest of us? Many of us are retired or soon will be, earning less than this threshold but holding investments to provide income, particularly dividend income. What are our prospects?