On Tue, 15 Jun 2010 00:24:42 -0700, "azotic"
wrote:

Bend over, grab your ankles and smile.

Example: Myra is a single filer with investment income of $100,000 and wages
of $200,000. But during the same year she loses $300,000 in a Ponzi scheme.
She pays no income tax, but she still owes the new Medicare tax of $3,800 on
her net investment income, says Sharon Kreider, a tax expert in Sunnyvale,
Calif.

The 3.8% tax on investment income also knocks down a longstanding wall by
applying a "payroll" tax to unearned income. Until now, FICA taxes for
Social Security and Medicare have applied only to wages, not investment
income.

http://online.wsj.com/article/SB10001424052748703890904575297351898565426.html?m od=rss_Today's_Most_Popular

Best Regards
Tom.

==========
The axiom is "hard cases make bad law."

However there appears to be no good/logical [current] reason
why "investment income" should be taxed at a much lower rate
than earned income, e.g. capital gains, nor any reason FICA
should not also apply to "investment" income.

The major problem appears to be that when these special tax
exemptions/exceptions/treatments were instituted, a return
on an "investment" could be assumed to only result from
expanded business operations resulting in increased economic
activity, expanded employment, and indirectly increased
governmental revenues.

Over time, with gross shifts in the domestic [US] economic
environment, this assumption appears to have gone from
largely correct/operational to largely incorrect.

Almost all of the frantic/manic activity that now generates
"investment income" does nothing to grow the domestic
economy/GDP, and indeed much of it *REDUCES* domestic
economic activity by exporting jobs, and consuming huge
amounts of capital, e.g. looting pension/retirement funds
and corporate assets.

It appears far more justifiable to remove the annual cap on
FICA taxes, given that much, if not all, of the shortfalls
now occurring are the direct result of deskilling and the
export of entire sectors of the domestic economy for
"investment" profit, and that special "capital gains" tax
rates/treatments should not apply to profits generated by
stock, bond, commodity and derivative trades/speculation in
the secondary markets, e.g. "carried interest." An actual
"Capital Gain" [i.e. an actual increase in the GDP] rather
than simply the transfer of money from one pocket to
another, frequently by highly questionable legal/ethical
means, and/or a plausible increase in domestic employment
resulting from such investment, should be overtly required
before any special/lower tax treatment than that imposed on
"earned income" is even considered, and then only on a "one
time" basis, i.e. "what have you done for me lately?"

It is suggested that people unhappy with this should
consider moving to Mexico or Kyrgyzstan where the taxes are
lower, or at least the rich don't have to pay.

-- Unka George (George McDuffee)
...............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).