How do taxes go up on those who pay no taxes?
Is it unfair that the poor have never gotten a tax cut?
It was the make work pay credit. It was a credit toward the payroll tax that yes, everyone pays. It was refundable, and it was eliminated during the second round of Obama's tax cut to be replaced by a one percent tax cut. It was four hundred dollars. If you made less than forty grand you ended up with a tax increase.
The whole Obamacare bullshit is only about one thing, the Obamacare taxes, specifically, the Medicare tax on investment income, and the surtax on that same investment income for those making more than a quarter million dollars a year.
Most people in the middle class work for a living. They don't have large investments. In fact, if they have them at all the majority are qualified, in retirement accounts that are tax deferred. And since they work for a living they pay income tax on twenty five cents on every dollar they earn after deductions and exemptions. That is in addition to the payroll taxes for Social Security and Medicare.
But some people have large investment accounts that are not tax deferred. They don't pay an income tax on their earnings, they pay a capital gains tax. The absolute most they would have to pay would be twenty percent. Twenty cents on every dollar.
Now if you ask me, that is kind of fubared. If you work for your money you pay 25%. But, if you sit on your ass and let your money work for you, you pay 20%.
Obamacare implemented a surcharge, and a Medicare tax, on that investment income. The surcharge was only for high income taxpayers. You know, the ones that have capped out on Social Security taxes. The Medicare tax was .9%. The surcharge was 3.6%. It almost "leveled the playing field". It almost "made work pay". It had to go.
