I received an email from a Realtor friend which included some strong rhetoric about the 3.8% tax on gains from the sale of residential real estate included in the new health care law, the Patient Protection and Affordable Health Care Act.
The point of the quoted rhetoric was to fuel voter sentiment against Democrats running for Congress in November by alleging that the bill is “set to screw the retiring generation who often downsize their homes.”
The 3.8% tax on gains doesn’t apply to the first $250,000 in gain from the sale of a residence and applies only to single persons earning at least $200,000 annually or couples earning at least $250,000. It’s plainly aimed at only a few households. Here’s a fairly rhetoric-free explanation: http://factcheck.org/2010/04/a-38-percent-sales-tax-on-your-home/.
I don’t think that many Americans are proud of Congress and its lack of bi-partisan cooperation in either crafting legislation to either allow competition or regulation, or some combination of the two, to effectively address the incredible inefficiencies in the way that health insurance and health care are administered. Large numbers of Americans – often the same people – want Medicare but hate the idea of a single-payer system, thinking of it as socialized medicine, so it’s no wonder that Congress can’t make anyone happy but the health insurance industry.
In the next few months, we’re going to hear a lot about the expiration of the Bush tax cuts and President Obama’s campaign promise to protect all the the highest-earning 2% of Americans from the expiration. James Surowiecki’s analysis of the make up of this top 2% shows that it includes a large number of of business owners and professionals who are essentially treading water, while those who make up the top 0.1% have seen their share of national income triple over the last 25 years. This top 0.1% earn as much as the lowest 120 million Americans. Surowiecki says that “taxing LeBron James and LeBron James’s dentist” at the same 38% rate is a big mistake.
Targeting the top 2%, rather than the top 0.5%, will surely hurt Democrats running for re-election.