Millionaire’s Surcharge
Although Obama’s jobs bill was killed in Congress some components may resurface in future proposed legislation. Initial proposals included a series of tax increases on individuals making more than $200,000 and families making more than $250,000. Among them was a 28% cap on the tax exemption for muni bond purchases. Senate Democrats replaced these tax increases with a 5.6% surcharge on adjusted AGI (AGI less a deduction for investment interest) above $1,000,000.
Fixed Capital Gains Tax
Without Congressional Action capital gains currently taxed at a maximum 15% will be assessed a 20% rate beginning in 2013. Dividends currently taxed at the same 15% maximum will rise to an individual’s ordinary rate. A House bill and a Senate billintroduced by Republicans attempt to permanently fix the rate on both dividends and capital gains at 15%.
Obamacare Tax Repeal
A 3.8% Medicare tax assessed against investment income begins in 2013 to offset the costs of Obamacare. Senator John Cornyn from Texas introduced a bill to repeal the assessment.
Paying Mortgages from Retirement Accounts
Proposed legislation in both the House and Senate would allow penalty-free withdrawals from tax-exempt retirement plans and pensions.
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