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At least one element of Obamacare appears may remain in the new health care bill being designed in the Senate.
The 0.9 percent Medicare surtax on upper-income earners may very well remain intact according to reports. The Washington Examiner reported that John Thune, Senate Republican Conference Chairman, said lawmakers have been discussing plans to maintain the surtax along with the mandated 3.8 percent investment tax for those same earners.
The Medicare surtax would save some $58 billion over 10 years and would combine with the investment tax to save $230 billion over that time. GOP leaders hope those savings can serve as a compromise in efforts to win over the handful of Republican in the Senate who continue to hold out against the proposed health care bill. An earlier draft of the bill would have slashed Obamacare’s taxes by $701 billion over 10 years.
Senate Majority Leader Mitch McConnell said a draft of the legislation should be released later in the week with a vote on the measure soon thereafter. It remains unclear when the Senate will vote on the bill as a whole.
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The Medicare surtax, otherwise known as the “Additional Medicare Tax,” is an added 0.9 percent tax that is applied to higher-income earners in addition to the standard 1.45 percent tax that applies to all earners.
For those who are married and filing jointly, the extra tax applies to those reporting at least $250,000 of wages, self-employment income and railroad retirement income. For people who are married but filing separately, the limit is $125,000. For all other filers, the limit is $200,000.
The Net Investment Income Tax (NIIT) is a 3.8 percent tax applied to the lesser of an individual’s net income from any investments. That includes, interest, dividends, capital gains, annuities and rental or royalty income. The income thresholds for the tax are the same as those of the Medicare surtax with the lone exception being widow(er)s with a child, who are exempt up to $250,000.
To learn more, read our article, What to Know About the Republican Health Care Bill.
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Sources
Washington Examiner: http://www.washingtonexaminer.com/senate-healthcare-bill-likely-to-keep-obamacare-taxes/article/2628310
IRS.gov: https://www.irs.gov/uac/what-is-the-additional-medicare-tax
IRS.gov: https://www.irs.gov/individuals/net-investment-income-tax
NBC News: http://www.nbcnews.com/politics/congress/here-s-how-wealthy-gain-gop-health-care-bill-n778741
Christian Worstell is a health care and policy writer for MedicareSupplement.com. He has written hundreds of articles helping people better understand their Medicare coverage options.
Christian Worstell is a licensed insurance agent and a Senior Staff Writer for MedicareSupplement.com. He is passionate about helping people navigate the complexities of Medicare and understand their coverage options.
His work has been featured in outlets such as Vox, MSN, and The Washington Post, and he is a frequent contributor to health care and finance blogs.
Christian is a graduate of Shippensburg University with a bachelor’s degree in journalism. He currently lives in Raleigh, NC.
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