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Reminder: Taxes already going up on the rich

July 9, 2012: 1:53 PM ET

(Official White House Photo by Pete Souza)

President Barack Obama reiterated his call Monday for the extension of the Bush tax cuts for people making less than $250,000 a year -- and a return to higher rates for wealthy Americans.

If Obama triumphs, the top tax rate on income will jump from a baseline of 35% to 39.6%.

But it's worth noting that even if the Republican position -- extending the Bush tax cuts for everyone -- is adopted, the rich are still likely to pay higher taxes in 2013. Why? The health reform law.

The health care law, upheld last month by the Supreme Court, contains two new Medicare tax changes that will help pay for health insurance subsidies.

Here's how CNNMoney described the scheduled tax increases in March:

The new increases in Medicare taxes will apply to individuals making more than $200,000 a year, or $250,000 for married couples.

The first involves the Medicare tax on earnings. Today, workers pay 1.45% of their wages into Medicare. Starting next year, high-income individuals will pay another 0.9 percentage points on their earned income over $200,000 ($250,000 if married).

The second change pertains to investment income, which to date has never been subject to the Medicare tax. But next year high-income households will start paying a 3.8% tax on at least a portion of their investment income, such as capital gains, dividends and rental income.

Roughly 4 million households -- or 2.4% -- will be affected by the increase initially, according to new estimates from the Tax Policy Center. By 2022 that number will grow to 8.3 million, or 4.6%.

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About This Author
Charles Riley
Charles Riley
Reporter, CNNMoney

Charles Riley lives and works in Hong Kong, where he covers markets, economics and other high-impact stories across Asia. He previously worked for CNNMoney in New York and CNN in Washington. He tweets @CRrileyCNN

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