Being a 1 percenter, I am now starting to see the effects of the new Obamacare taxes for high earners. In addition to these new taxes, there are other taxes not available to people like me. I’ve outlined them in a previous post.
The two new taxes this year in 2013 are the
- 3.8% additional tax in investment income
- 0.9% additional in Medicare tax
Both of them hit individuals earning more than $200,000 or married couples earning more than $250,000. That said, we are that point in time of the year where these additional taxes are hitting us. I knew these taxes were coming, but I honestly forgot about them until recently. Just this morning, I opened up my paystub and noticed that is was $50 less than what I normally receive. As I dug deeper, I noticed the Medicare tax was higher than usual.
That got me thinking how much more in taxes we will pay this year on top of what we normally would have paid. Since the investment income tax also applies to rental income and dividends, we will end up paying thousands more in taxes. Here is the breakdown.
- Rental income – additional $1,500 in investment income taxes
- Dividend income – additional $50 in investment income taxes
- Wages – additional $1,800 in Medicare taxes
Total additional taxes in 2013 will be $3,350. I know, some of you may say “well, you can afford it” or “who cares, you’re worth over a million dollars”. And you’re right in both cases, but in my opinion that doesn’t matter. No one spends money more efficiently than the person who earned it. If this trend continues, where the government feels they can keep skimming off the top, then what will happen is my wife and I will look at each other and say “why are we working so hard.” Its called the law of decreasing marginal returns. You will then come to a point where no one works too hard because the high earners and the low earners will have no incentive to produce.
Thanks for visiting I Am 1 Percent. Please subscribe so that you will receive all the latest posts directly to your email!