Maybe I should know this, but I don't:

What was Cooper's consideration, that he voted "yes" on the Senate bill, but "no" on the reconciliation?

(Thanks.)

Congressman Jim Cooper - COOPER VOTES FOR GREATER COST SAVINGS:

WASHINGTON - Congressman Jim Cooper (TN-5) voted against the so-called reconciliation bill tonight, the add-on provisions to the Senate health reform bill that he supported earlier in the evening. The add-on was approved by the House on a vote of 220-211, despite Cooper's opposition to the provision.

Cooper opposed the add-on because passage of the separate Senate bill was sufficient to ensure health care reform for all Americans. In Cooper's opinion, the add-on made health care reform more expensive than necessary. Cooper is looking forward to the President signing the Senate health reform bill that he supported into law in the next few days.

The add-on increased the size of the health care bill by $160 billion, added Medicare taxes for the first time on unearned income, included completely unrelated student loan reforms, and will prolong the divisive health reform debate for days, and possibly weeks, in the U.S. Senate. Another key issue was the fact that the add-on reduced the effectiveness of one of the primary cost-containment devices of the Senate bill by as much as 80%.

"The excise tax on health insurance plans with Ferrari-type benefits was the most powerful tool for reducing health care costs," said Cooper. "The Reconciliation bill, if approved by the Senate, could significantly reduce these cost savings."

Cooper has been consistent in preferring the Senate bill to the earlier House legislation. He has also been consistent in pressing for clear up-or-down votes on separate pieces of legislation in order to promote transparency in government. The reconciliation add-on has the effect of bulking up the Senate bill so that it looks more like the original House legislation.

"The add-on increased the size of the health care bill by $160 billion, added Medicare taxes for the first time on unearned income..."

Is this the allusion I've been reading to new taxes on "incomes over $200K (or was it $250K)?"

If so, why did the bill's sponsors/amenders choose to begin taxing unearned income to support Medicare, rather than simply raising that cap on earned income subject to the Medicare payroll tax? Because they imagined that taxing this unearned income would cause those higher up the income ladder to carry the larger funding burden, maybe?

Or does the new tax possibly raise that cap on earned income subject to the tax AND begin taxing unearned income?

(I don't mean to appear too lazy to research my own questions--I'm just too busy to right now! If you know, thanks!)

It is unlikely that Lincoln Davis will ever provide a cogent reason for voting no on healthcare reform. The major blue dog objections were nullified, because the CBO says the bill will reduce the deficit over 10 years, and the anti-abortion provisions were strengthened. The insurance industry was mollified by adding to its rolls without much cost control on premiums. Millions of distressed Americans will receive some relief. So what's left? All I can think of is that he votes the GOP party line, against all reason.

The bill raises the medicare "payroll" tax by 0.9% on income over $200,000 for individuals or $250,000 for married filing jointly.

It also extends the Medicare tax to income from investments such as interest and dividends for individuals with income over $200,000 or $250,000 if married filing jointly.

It is not clear if the new tax on "unearned income" will also apply to capital gains.

I asked...

It isn't clear to me whether wages between $106,800 and $200,000 are also to become subject to payroll tax withholding for Medicare?

And if wages in that middle bracket are NOT to become subject to payroll tax withholding for Medicare, what is the rationale to tax the little guy earning less than $106,800 AND to tax the big dog earning over $200,000 but to exempt this middle group altogether?

...but I don't find any answer in the CNNMoney story, nor in any other news article. Everything I've read seems to indicate that the new Medicare tax imposes "higher" taxes on persons earning over $200K, as if they had paid some amount of Medicare tax all along?

But people earning over $200K (or even earning over that $106K) were never subject to any payroll tax for Medicare before. Did they possibly pay a Medicare tax at year end, through their annual returns, prior to this?

My household doesn't fall in this income range and it's been 20+ years since I prepared tax returns for others. Where's Stan when we need him?

The IRS rule you referred to is Social Security, not Medicare payroll tax. There is no cap on Medicare payroll tax as far as I know. (We should do the same thing for Social Security, but that's another discussion).

The tax on earnings will be collected through withholding just like it is now.

I presume for interest and other income it will be reported by way of 1099s just like it is now. The financial or other paying institution has to track the amounts and there is a mechanism for "backup withholding" unless you file a W9 claiming exemption, in which case you report it on your 1040 and pay the tax. Most people are exempt unless the IRS has notified them otherwise because they are caught not reporting unearned income.

If capital gains are taxed, presumably it will be by way of 1040 Schedule D where capital gains are reported. There is no withholding, you just pay the tax.

Here's what the bill says about investment income:

IN GENERAL.—The term ‘net investment income’ means the excess (if any) of—
(A) the sum of—
(i) gross income from interest, dividends, annuities, royalties, and rents, other than such income which is derived in the ordinary course of a trade or business not described in paragraph (2),
(ii) other gross income derived from a trade or business described in paragraph (2), and
(iii) net gain (to the extent taken into account in computing taxable income) attributable to the disposition of property
other than property held in a trade or business not described in paragraph (2),over
(B) the deductions allowed by this title which are properly allocable to such gross income or net gain.

This appears to say capital gains are subject to the tax.