This week’s MarketPlace discusses the new law. You can listen to the remainder of the segment below here and the entire show is here.
How is it funded?
GREGORY WARNER: So leaving aside the fees coughed up from the pharmaceutical industry, and the medical devices industry and the insurance industry, in terms of what average individuals are going to pay, there are two things. First, the payroll tax, and this is for families making more than $250,000 or individuals making more than $200,000. There’s going to be a 3.5 percent tax on honored income, basically income from investments and things like that. And that begins in 2012.
Second further down the line, in 2018, there’s going to be an excise tax and that’s a 40 percent tax on these Cadillac insurance plans, basically really good plans with lots of benefits.
I had heard about the tax on passive income. Is there evidence that this is on top of ordinary income tax rates and does it apply to traditionally tax free investments like a 401K?
There seems to be little doubt that there is an intent to tax those making less than $250K per year.
“less than” or more than?
Your post from CNN on the Health Calculator post seemed helpful in some ways. The comments regarding the income limits seem to indicate the brunt of the passive tax would fall to those in the higher brackets.
Assuming you have read my comments on the Health Calculator post do you concur that many of these taxes and costs will end up being paid by those earning less than $250K?
No concurrence yet. I would need more specifics.