Tuesday, March 23, 2010 Health Care Bill Passes House - Places Medicare Tax on Investment Income
THe House passed health care bill includes, for the first time ever, a 3.8% Medicare tax on investment income for individuals earning more than $200,000 per year and for couples earning more than $250,000 per year. The tax will be applied to all unearned income, including capital gains, dividends, and rental properties. Thankfully, this tax is not effective until 2013.
Other changes include limiting employee's tax-free contributions to health flexible spending arrangements to $2,500 per year. In a win of sorts for seniors, the reduction of itemized medical expenses is increased from 7.5% to 10% unless you are at least 65 years old.
What is the next step?
All of the changes were be made through the use of the budget reconciliation process, which cannot be filibustered under Senate rules, allowing Democrats to pass the bill with 51 votes. However, the rules for reconciliation bills are also likely to require President Obama to sign the Patient Protection and Affordable Care Act before the Senate can take up the House reconciliation bill on the floor. As a result, Obama is expected to sign the bill today (3/23/10). The Senate then must approve the reconciliation bill.
Stay tuned for further developments. |