Health Care Reform Will Bring Higher Taxes
The Health Care Reconciliation bill includes a new 3.8% Medicare tax on investment income, which includes IRA distributions, interest income (including tax exempt), dividends, capital gains, rental income and oil royalties.
Under H.R. 3590, there is also a 1% increase in the employee Medicare tax on all earnings. Taxpayers with income under $100,000 will benefit from partial exemptions.
Congress has promised the two new taxes are temporary (10 years or so)- but don’t hold your breath.