Growing up on a resort island on the coast of Georgia, I know my share of millionaires. How many of those people actually earn upwards of a million dollars a year, I don’t know, but this is for them. If health reform gets enacted, there’s going to be an increase in the Medicare payroll tax for wealthy individuals–those earning $200,000 or more per year ($250,000 for couples). Since everyone lucky enough to live to 65 will receive Medicare benefits, this can’t exactly be called an entirely redistributive tax. People who pay into the program get benefits back from the program. Seems pretty fair.
So what’s the tax increase? Well, it’s slated to go from 1.45% up to a whopping 2.35%. Yep. That’s less than 1 percentage point. Of course, in some places with a different bias you may see it referred to as a 62% increase, and that would–technically–be correct. Ah, the joy of playing with numbers. Rather than dealing in abstract percentages, however, I thought it would be useful to see what the effect of the change would be for someone earning a million dollars a year.
- Under the current tax, an individual earning $1 million would pay: $14,500 to Medicare
- Under the new tax, an individual earning $1 million would pay: $23,500 to Medicare
So, we’re talking about an increase of $9,000 in Medicare taxes for every $1 million in income an individual has. Personally, I’d imagine that if people who earn that were to look under their sofa cushions they would come up with more than $9,000. And you know, if they’re unhappy with it, I’d be more than happy to switch salaries with them. In fact, I’d even double my $9,000 contribution to Medicare. When it comes to American values, we ought to call one of them exactly what it is: Greed.