WASHINGTON BUREAU – Life insurers are blasting an Obama administration effort to raise revenue for Medicare by imposing a new tax on high-income Americans’ earnings from annuities and other investment vehicles.
Administration officials included the tax provision in a health system change proposal released Monday.
The provision would impose a 2.9% assessment on income from interest, dividends, annuities, royalties and rents collected by individuals earning more than $200,000 per year and families earning more than $250,000.
The proposed tax also would apply to capital gains, an administration official says. That would push the capital gains tax rate to 22.9% in 2011, up from 15% today and a rate of 20% now scheduled to take effect in 2011.