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December 24, 2012

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Where that will get interesting is the two-income $125-150K each population, which will owe the tax collectively, but would not individually. Right now, spouses making roughly the same amount should, as a rule, file jointly*; this will create areas where it is to their advantage to file separately.

That also answers why the surtax is only on the employee side of the equation: the accounting is impossible at the corporate level, probably even if both spice work together. (Say you make $199K; Brad, who was on sabbatical for half the year, makes $95K--Medicare tax is owed on $44K, but by whom?? Only the couple (and their accountant) can do the aggregation.

I think it's more an effort not to means-test Medicare. It reduces "return" for those who can afford it most, but keeps benefits constant while shoring up the system some. Or, more accurately, it's effect is to delay means-testing as long as possible.

*Obviously, it's not even close if the incomes are disparate and you effectively "lower the bracket" of one income by doing so. But the margin shifts, as it may well do in the example above.

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