Bernie Sanders and Elizabeth Warren’s bold tax hike to shore up Social Security
The senators’ new bill would add a 12.4% payroll tax on ordinary income above $250,000, raising the effective top rate by a third from 37% to 49.2%.
The bill would also add a 12.4% payroll tax on investment income for those earning over $250,000, but this would not be restricted to interest, coupons and dividends. Instead it would apply to all investment income “as defined in the Affordable Care Act,” which includes all capital gains, long and short. The ACA — Obamacare—levied a 3.8% tax on such income for top earners. The latest proposal would raise the top rate of capital-gains tax by a half, from 23.8% to 36.2%.
