Buried in Nancy Pelosi's health-care bill is a provision that will partially
repeal tax indexing for inflation, meaning that as their earnings rise over
a lifetime these youngsters can look forward to paying higher rates even if
their income gains aren't real.
This is a sneaky way for politicians to pry more money out of workers every
year without having to legislate tax increases. The negative effects of
failing to index compound over time, yielding a revenue windfall for
government as the years go on. The House tax surcharge is estimated to raise
$460.5 billion over 10 years, but only $30.9 billion in 2011, rising to
$68.4 billion in 2019, according to the Joint Tax Committee.

And by the way, this surcharge has also been sneakily written to apply to
modified adjusted gross income, which means it applies to both capital gains
and dividends that are taxed at lower rates. So the capital gains tax rate
that is now 15% would increase in 2011 to 25.4% with the surcharge and
repeal of the Bush tax rates. The tax rate on dividends would rise to 45%
from 15% (5.4% plus the pre-Bush rate of 39.6%).

The return of the inflation tax demonstrates once again the stealth
radicalism that animates ObamaCare. In the case of inflation indexing,
Democrats would repeal a 30-year bipartisan consensus that it is unfair to
tax unreal gains in income, thus hitting millions of middle-class Americans
over time with tax rates advertised as only hitting "the rich." Oh, and the
House vote on this exercise in dishonest government will come as early as
Saturday.

http://online.wsj.com/article/SB1000...170939688.html

Best Regards

Tom.