And so it begins… the IRS is beginning to “clarify” what all those taxes in ObamaCare will look like.
They’re starting with one of the most damaging to job creation: taxes on income from investments.
The Internal Revenue Service has released new rules for investment income taxes on capital gains and dividends earned by high-income individuals that passed Congress as part of the 2010 healthcare reform law.
The 3.8 percent surtax on investment income, meant to help pay for healthcare, goes into effect in 2013. It is the first surtax to be applied to capital gains and dividend income.
The tax affects only individuals with more than $200,000 in modified adjusted gross income (MAGI), and married couples filing jointly with more than $250,000 of MAGI.
The tax applies to a broad range of investment securities ranging from stocks and bonds to commodity securities and specialized derivatives.
The 159 pages of rules spell out when the tax applies to trusts and annuities, as well as to individual securities traders.
Released late on Friday, the new regulations include a 0.9 percent healthcare tax on wages for high-income individuals.
Both sets of rules will be published on Wednesday in the Federal Register.
If you wonder why this tax is a job-killer, allow me to explain briefly.
People invest in businesses, either new or existing. Those businesses then use those investments to expand, which much of the time includes hiring new people. Consider: if a Seattle-based company wants to open a branch in Portland, they’re going to need people to work in it, right?
However, the investors are looking to make a profit on their investments. Many of them use their investment income for their basic living expenses, especially the elderly with 401(k)s. By taxing that income more heavily — and remember, this is a surtax, on top of the existing taxes — the Obamacrats are providing a powerful disincentive to investment, meaning fewer businesses expanding, and fewer jobs created.
Some of us tried to warn of things like this before the election, but the American People have said that the majority of them want higher taxes, especially on “the rich.” So, there you go, folks. Hope you enjoy it.