You might have read that Mitt and Ann Romney have paid less than 15% in Federal Income Tax, for the only two years that they have released Returns. Of course we don’t know the situation–what investments are included and taxes paid, if any–for the reported $100 Million that they have invested in Overseas Tax Havens (i.e. Bermuda, Cayman Islands and Switzerland).
The Romney’s, according to the linked article from a recent NY Times Column, by Floyd Norris, Obama’s Health Care Law Would Drive Romney’s Tax Bill Up, http://thecaucus.blogs.nytimes.com/2012/09/21/obamas-health-care-law-would-drive-romneys-tax-bill-up/, points out the impact of the Affordable (Health) Care Act (ACA) on the Taxes of couples with an income of $250,000, or more. They would pay a Medicare Tax Rate of 3.8% on income above that amount, beginning in 2013. According to the article, they currently pay very little.
Three of the biggest Tax Loopholes, among many others, that the very wealthy enjoy are: Unlimited Tax-Free Income received on Municipal Bonds (issued by State and Local Governments); an Unlimited Maximum Tax on Capital Gains of 15%; and something Called “Carried Interest”, also Unlimited at 15%, derived by Hedge Fund and Private Equity Executives (such as those at Bain Capital, current and past).
The Administration is trying to place limitations on the amount of Municipal Bond Interest that is Exempt from Federal Income Tax, as well as raise the Capital Gains and Carried Interest Rate above 15%. The focus of this post, however, is primarily oriented to the impact of the Medicare Tax on All Income for Wealthy Taxpayers.
Of course, that Medicare Tax would be in addition to the higher Federal Income Tax Rate which would be reinstated, in 2013, if Congress does not act. So far, Congress has passed an extension to keep the US Government funded; but, only through the Election. If it hadn’t acted, the US Government would have been in trouble–once again–beginning on October 1.