Who’s Paying for Healthcare Reform?

The debate over healthcare reform has created the first major policy bump in the road for the Obama administration. While it seems unlikely at this point that we will see the sweeping reform that the President initially envisioned, it seems equally unlikely that we will emerge from this debate with no change on the healthcare horizon. So what does this mean for the American taxpayer?
First, taxes are going up for the wealthiest Americans regardless of what happens with healthcare. The two highest income tax brackets, 33% and 35%, are expected to be replaced with 36% and 39.6% brackets that will stage in at lower income levels beginning in 2011. Also in 2011, the tax rate on capital gains and dividends is expected to rise from its current 15% to 20%. Another revenue raiser proposed by the Obama administration that has received less attention lately is a reinstatement of the Social Security tax on earned income over $250,000. Currently, Social Security tax is assessed on earned income up to $106,800.

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