WASHINGTON – Even if the White House and lawmakers compromise and avoid the so-called “fiscal cliff,” some Americans are going to see their taxes go up.
The tax increases are part of the 2010 health care law, and they go into effect after the first of the year.
Employees and employers already pay a tax on wages to help finance Medicare. But starting in January, single workers will pay an additional tax equal to .9 percent on any wages over $200,000. The new tax as part of the Affordable Care Act is called “unearned income Medicare contribution.”
Married couples filing jointly will pay the additional tax if they earn more than $250,000.
Ruth M. Wimer, a tax lawyer, tells the New York Times, it’s “a shockingly inequitable marriage penalty.”
Wimer explained to The Times that if a single woman and a single man each earn $200,000, neither would be affected by the additional tax. However, if they were married, they would owe $1,350.
Those who have a lot of investments could see an increase as part of health care law, too — about 3.8 percent on the net investment of high-income taxpayers. The new taxes are expected to raise $318 billion over 10 years.
The New York Times reports the most affluent fifth of households will see an average tax increase of $6,000 next year. Wealthy individuals are strategizing with their tax advisors now to lesson the bite.
To find out more about the tax changes coming, visit The New York Times.
WTOP’s Jeanne Meserve contributed to this report.
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(Copyright 2012 by WTOP. All Rights Reserved.)