Form 8960 – did you have to fill this out when you did your taxes?
Probably not. This form details the Net Investment Income tax added as part of the ACA. For the 1st time, this applied a tax to Net Investment Income that would go toward Medicare.
Why is this important? Because many high-wage income earners do not earn income through self-employed or payroll-based formats. That means their income is not subject to payroll taxes. And Payroll taxes are how most of us fund Social Security and Medicare.
But what if you earn all your money through a trust fund or through investments?
Well before the ACA you didn’t have to pay into Medicare while you were working – AND you got the benefits of Medicare including the premium cap that sets a maximum limit on the premiums paid. That premium cap means the more you make, the lower % of your income is paid into Medicare Premium.
Sounds like a win-win, right? For those in the top 2%, it sure is. Now many could have avoided this tax by not taking their income – or putting off transactions that might trigger income just to avoid the taxes.
But some people do still earn a lot through payroll taxes, right? Well the Additional Medicare Tax had those people who earn more than 97% of us pay some additional tax into Medicare as well. [They had to complete Form 8959]
When the ACA is repealed and replaced, these two taxes go away.
And Medicare loses funding. And it is weakened. And it will be pronounced to be in a death spiral and the proposal will be whipped out that privatizes Medicare making it a voucher system helping the rich even more – and hurting the very people Medicare was created to protect.
WHY IS THIS OK?
Why is it fair to have the top 2% pay LESS for public services?
Why can’t we have a simple law that puts these taxes in place to fund Medicare and separate this from the mucking about with the ACA?
And let all of our elected officials go on the record as to why they think the top 2% should benefit from Medicare without paying anything into it while working:?
Better yet, how about asking every one of them to disclose how they will personally benefit from the elimination of this tax….