Obamacare and Your Investments

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After spending about an hour translating the latest 150 some odd pages of documentation at www.irs.gov pertaining to the first Obamacare taxes (I wish those guys would write in English over there) I have figured it out. I already wrote a discussion about the medical device tax, but some further information has come to light on that issue: According to one medical device company, since those taxes are imposed on pure gross sales, the actual impact will be about 15%--rather than the tax amount. To put it in ordinary terms--normally, a tax is imposed on a product, like a table, one of two ways. If a table is sold wholesale, for resale purposes, the person buying the table doesn't pay a tax when they buy it, only when they sell it--the sales tax imposed by the state it is sold in. They also pay their standard corporate taxes on their adjusted gross--their profit--each year, of course. The company who makes that table pays corporate taxes on their total sales--but NOT on pure "gross" sales.Ordinary corporate taxes are paid on adjusted gross--profit, in other words. But not this time. As an example, in ordinary cases, company ABC sells 100,000 dollars worth of product, and makes 40,000 in profit (very profitable company, wish it were mine LOL). The 3.2% medical device tax would have only been applied to the 40,000. Now, it will be applied to the 100,000. Some analysts are speculating that this new tax will cost the industry over 40,000 jobs. Additionally, one company has already shelved plans to open several new manufacturing facilities. Now on to investments--this is for the 2%, so to speak. Starting 1 January, if you are a single person making over 200,000 a year or a couple making over 250,000 a year, all of your income from investments that is over those base levels will be taxed 3.8%. It gets complicated: if, for instance, you are a couple that makes 220,000 a year in standard income, and 50,000 a year in investment income, then 20,000 of your investment income will be taxed at this additional rate (the other 30,000 is still below the 250,000 figure)--on top of your ordinary taxes for making a total of 270,000. Which means, if those terrible Bush tax cuts expire, your actual taxes on your investment income will more than double. Quite a bite. By the way, those lucky people will also be paying an extra .9% medicare taxes on their regular income. Makes me glad I'm no longer in that group. By the way, those are just the first of the taxes kicking in, the 2013. there are more coming in 2014-2020.