Penelope
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- Jul 15, 2014
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ACA Repeal Would Lavish Medicare Tax Cuts on 400 Highest-Income Households
Each Would Get Average Tax Cut of About $7 Million a Year
First, it would eliminate two Medicare taxes — the additional Hospital Insurance tax and the Medicare tax on unearned income — that both fall only on high-income filers, thereby cutting taxes substantially for those at the top.
· The top 400 highest-income taxpayers — whose annual incomes average more than $300 million apiece — each would receive an average annual tax cut of about $7 million, we estimate from Internal Revenue Service (IRS) data.
· This group’s tax cut would total about $2.8 billion a year.
· The roughly 160 million households with incomes below $200,000 would get nothing from the repeal of these two taxes
· The ACA’s Medicare taxes fall only on individuals with incomes above $200,000 and couples with incomes above $250,000.
· These individuals and couples pay an additional 0.9 percent Hospital Insurance tax on earnings above those amounts, raising the employee share of their Medicare tax rate on earnings to 2.35 percent, from 1.45. They also pay a 3.8 percent Medicare tax on unearned income above those thresholds that’s derived from wealth, such as capital gains, dividends, taxable interest, and royalties.
· Before health reform, Medicare taxes applied only to wage and salary and self-employment income, not to unearned income from wealth. For low- and moderate-income working families, which have little unearned income, this meant that Medicare taxes applied to virtually all of their income. In contrast, the wealthiest taxpayers owed no Medicare taxes on their unearned income, which represents a significant share of their income.
· ACA Repeal Would Lavish Medicare Tax Cuts on 400 Highest-Income Households | Center on Budget and Policy Priorities
Why the wealthy and the republicans hate the ACA. Not only is it about money, but about the immorality of the wealthy.