Thursday, March 18, 2010
Taxing interest and dividends to pay for health care
Via Glenn, we learn that the House health care "reform" bill contains a 3.8% Medicare tax "on investment income (interest, dividends, capital gains, annuities, rents) earned by those with incomes in excess of $200,000 (single) and $250,000 (joint)." That is a 25% increase in the current dividend tax, which today stands at 15% (and for those of you who snort that 15% is not so much, remember that it is on top of the 35% corporate income tax rate and frequently large state corporation taxes, so the total tax on distributed corporate profits is more like 50%).
A good policy, I suppose, if your goal were to persuade Americans to stop buying bonds and making long-term bank deposits, companies to repurchase their shares rather than to pay dividends, and potential landlords from becoming actual landlords. Dividends, in particular, are so easily frozen, reduced, or eliminated that it is a sure bet that they will shrink rapidly in coming years and that the tax revenues therefor will vanish.
15 Comments:
By 
, at
Thu Mar 18, 07:12:00 PM:
Statment today by Congressman Paul Ryan:
"Now that the CBO has released their preliminary estimate, let’s review what House Majority Whip James Clyburn is so 'giddy' about: it expands entitlement spending by roughly $1 trillion; it hits the American people with over half-a-trillion in tax hikes; it uses Medicare as a piggy bank with over half-a-trillion in Medicare cuts to create a new entitlement; and includes a number of egregious gimmicks that hide the true cost of the bill.
When you expose the smoke and mirrors and look at the reality of this legislation, it is clear that this bill will not reduce deficits and will not control costs. The American people cannot afford the costly consequences of this health care debacle.”
By , at
Thu Mar 18, 07:37:00 PM:
I don't see how we can fail to be humbled by the fact that this bill was created by a room full of geniuses. It is, I'm sure, such a work of art that the only sensible attitude for most of us is to just be thankful that it's done so we can begin to understand all the good that was done to us.
We are now all suicide bombers for the cause of Obama's presidency. Praise be to allofus.
M.E.
By 
pst314, at
Thu Mar 18, 10:38:00 PM:
"...earned by those with incomes in excess of $200,000..."
How long before the threshold would become $50,000? $20,000? Zero?
By , at
Thu Mar 18, 11:05:00 PM:
This tax has two nasty features.
1) If you meet the income threshold, all of your portfolio income is subject to it, not just the amount over the threshold.
2) It's a Medicare tax, so its real net out of your income is 25+% more than the equivalent points of income tax.
I don't see where the 3.8% comes from. Yes, the Senate bill increases the employee-side Medicare tax by 0.9%, but that only applies to wages and self-employment income, not portfolio income.
By JPMcT, at
Thu Mar 18, 11:24:00 PM:
The CBO estimate actually banks on the supposition that Federal revenues will increase with these extra taxes.
Do any of these people have history books. If not, do any of them have common sense.
The inmates have taken over the asylum.
By , at
Fri Mar 19, 06:05:00 AM:
I've suspected this angle to Healthcare for awhile: SEIU President -- and #1 White House visitor -- Andy Stern needs Healthcare as a means to boost SEIU's membership. What I learned from the following is that SEIU needs these new fresh members to prop up its pension plans.
"Several SEIU pension plans are in critical status, meaning they have less than 65% of assets needed to fund financial obligations to future and current retirees, or in endangered status, with less than 80% of needed assets."
Obama has already used TARP to bailout the UAW, so this is hardly far-fetched.
Why the SEIU Wants Health Reform
ps SEIU officers have their own separate plan -- it's 102% funded.
By , at
Fri Mar 19, 06:36:00 AM:
"Why man, he doth bestride the narrow world
Like a Colossus, and we petty men
Walk under his huge legs and peep about
To find ourselves dishonorable graves."
... Bullshit!
We shouldn't be surprised if the Democrats get to 217 -- how could they not? Obama has a date with the FDR pen. He'll unstaple the two term sheets passed by the House, and sign the Senate version into law. Hopefully before the late NCAA games on Sunday.
But South Boston Congressman Stephen Lynch has just switched to NO, and is staying NO even after being summoned to the White House yesterday. Lynch is a fruitcake, but a savvy one. Think Joe Biden without the charm. He's also one of Nancy's junior whips. Lynch professes other reasons, but I suspect the true one: Lynch is well aware of how well Scott Brown polled in Southie.
This isn't over yet. Harvard Wins 216-216!
By , at
Fri Mar 19, 07:02:00 AM:
All the News that Fits!
Just saw this: NYT is reporting on which Democrats will get a pass from Nancy so that they can vote No. Subliminal message is that it's a done deal.
I've seen lots of stories about Kuchinich flipping to Yes, but hardly any on Lynch flipping to No.
What I don't see is anything on how many of Stupak's Dirty Dozen are holding out. If Nancy fails it'll be because enough hold out -- and Nancy is unable to get fresh Yes's to accept November seppuku.
By , at
Fri Mar 19, 07:04:00 AM:
All the News that Fits!
Just saw this: NYT is reporting on which Democrats might get a pass from Nancy so that they can vote No. Subliminal message is that it's a done deal.
I've seen lots of stories about Kuchinich flipping to Yes, but hardly any on Lynch flipping to No.
What I don't see is anything on how many of Stupak's Dirty Dozen are holding out. If Nancy fails it'll be because enough do hold out -- and Nancy is unable to get fresh Yes's to accept November seppuku.
By , at
Fri Mar 19, 09:53:00 AM:
I trip over this stuff doing my day job.
WHIP COUNT: House Democrats' positions on the healthcare reform bill
Pelosi can stand up to 37 Democratic defections. This article says that ... 36 look NO ... 48 are JUMP BALL. On radio, Stupak is saying that his Dirty Dozen are standing firm.
Honolulu, we have a problem.
I don't want to believe this, because it's such a disconnect from the mainstream reported narrative. But "deem and pass", Air Force One joyrides, Obama on Fox all look like signs of desperation, despite the botox smile Pelosi has been putting on.
ABC has the count at 206 NO, 200 YES, 25 JUMP BALL.
Joe Biden has a bad habit of talking out of school. On ABC this morning he said that vulnerable members of Congress have been giving Obama an earful. Talking back to the One? Hmmmm .... It sounds like Obama-Pelosi need to ask some of those who got to vote NO last time to vote YES this time ... and they're reluctant to jump.
"Pride goeth before destruction, and an haughty spirit before a fall." Let us pray ..........
By , at
Fri Mar 19, 10:12:00 AM:
The sole objective of the Kenyan and his pimps is to destroy the middle class in America.
A tax on investment income will exclude dem friends, relatives, union members and Hollywood types and start with those who earn a certain level. Once in place, the dems will try to drop the level.
The main point being overlooked here is that Obama will inevitably point out that the only way to raise enough money to keep us from bankruptcy is to stop military spending.
By D.E. Cloutier, at
Fri Mar 19, 01:42:00 PM:
Quote from Warren Delano, the maternal grandfather of Democratic President Franklin Delano Roosevelt: "I will not say that all Democrats are horse thieves, but it would seem that all horse thieves are Democrats!"
(Source: "Picking a Tartar," Time magazine, 26 March 1956)
By , at
Fri Mar 19, 03:57:00 PM:
Upsets everywhere.
My spidey sense says that Obama-Pelosi are still at least a dozen votes short. MSM buzz says it's closer, but that doesn't feel right. Some House Democrats aren't answering Obama's calls.
So Obama is summoning the entire House Democratic caucus to the White House tomorrow at 4 pm. Harry Reid too. I don't think it's for the NCAAs. This is a tell that Obama-Pelosi are getting desperate. A big group open meeting is not a good place to offer bribes or twist arms. Which is why I think Obama-Pelosi are still more than a few votes short. Expect the "we all hang together, or we all hang separately" speech. <a href="http://www.politico.com/politico44/index.html?refresh=1>Source</a>
Obama-Pelosi could still close this out before tomorrow at 4 pm, if they could only find an answer for Stupak and what's left of his Dirty Dozen. It's reported that Reid has been trying to get a pledge signed by 51 Democratic Senators that they'll give Stupak the anti-abortion language he was promised. But even if Reid could deliver such a pledge, Stupak should know that the Republicans are poised to upset things in the Senate -- he can't count on Senate Democrats honoring any pledge. Last week, Obama & Co threatened Stupak with trumped-up ethics charges for refusing to fold -- I don't see him folding easily between now and tomorrow.
If it goes to a Democratic-only caucus tomorrow, it may get truly interesting. There have to be at least a few dozen Democrats who now hate Obama and Pelosi at least as much as I do. When Obama meets with the Republicans, they have to be deferential to him. But it'd only take one outspoken Democrat tomorrow to start an epic food fight.
Still developing ....
By , at
Fri Mar 19, 06:51:00 PM:
>> A good policy, I suppose, if your goal were to persuade Americans to stop buying bonds and making long-term bank deposits, companies to repurchase their shares rather than to pay dividends, and potential landlords from becoming actual landlords.
It's an excellent policy if your goal is to redirect investment from the private sector to the tax-free public sector. Say, for example, if you look in your crystal ball and see a never-ending trail of government red ink. It's even better if your little crystal ball says that foreign buyers of your debt are losing interest and/or ability to continue their purchases.
These guys are not stupid. They are evil, but they are not stupid.
By , at
Mon Mar 29, 02:38:00 PM:
In an effort to stimulate the overall economy and R&G Brenner, as well help particular sectors that have been hard hit in the recent downturn, there are a lot of tax changes that have been implemented for 2009 and 2010 that taxpayers should be familiar with. If the taxpayer is using a professional tax preparation service, the service should be aware of all of the new changes, but otherwise it is up to the taxpayer to find out about them.
